☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Nevada | 74-2897368 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
12701 Commonwealth Drive, Suite 9, Fort Myers, | ||
Florida | 33913 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ☐ | Accelerated filer | ☑ | |
Non-accelerated filer | ☐ | (Do not check if a smaller reporting company) | Smaller Reporting Company | ☐ |
Emerging Growth Company | ☐ |
• | Our ability to implement our business strategy; |
• | The expected reimbursement levels from governmental payers and private insurers and proposed changes to those levels; |
• | The application, to our business and the services we provide, of existing laws, rules and regulations, including without limitation, Medicare laws, anti-kickback laws, Health Insurance Portability and Accountability Act of 1996 regulations, state medical privacy laws, federal and state false claims laws and corporate practice of medicine laws; |
• | Regulatory developments in the United States including downward pressure on health care reimbursement; |
• | Our ability to maintain our license under the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”); |
• | Food and Drug Administration regulation of Laboratory Developed Tests (“LDTs”); |
• | Failure to timely or accurately bill for our services; |
• | Our ability to expand our operations and increase our market share; |
• | Our ability to expand our service offerings by adding new testing capabilities; |
• | Our ability to meet our future capital requirements; |
• | Our ability to integrate future acquisitions and costs related to such acquisitions; |
• | The impact of internalization of testing by customers; |
• | Our ability to maintain service levels and compete with other diagnostic laboratories; |
• | Our ability to hire and retain sufficient managerial, sales, clinical and other personnel to meet our needs; |
• | Our ability to successfully scale our business, including expanding our facilities, our backup systems and infrastructure; |
• | The accuracy of our estimates regarding reimbursement, expenses, future revenues and capital requirements. |
ASSETS | March 31, 2018 | December 31, 2017 (as adjusted) | ||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 15,173 | $ | 12,821 | ||||
Accounts receivable | 58,129 | 60,427 | ||||||
Inventories | 7,515 | 7,474 | ||||||
Other current assets | 6,954 | 5,153 | ||||||
Total current assets | 87,771 | 85,875 | ||||||
Property and equipment (net of accumulated depreciation of $44,024 and $40,530, respectively. | 40,411 | 36,504 | ||||||
Intangible assets, net | 72,751 | 74,165 | ||||||
Goodwill | 147,019 | 147,019 | ||||||
Other assets | 1,320 | 891 | ||||||
Total assets | $ | 349,272 | $ | 344,454 | ||||
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 13,048 | $ | 10,450 | ||||
Accrued compensation | 10,164 | 9,482 | ||||||
Accrued expenses and other liabilities | 9,884 | 7,550 | ||||||
Short-term portion of capital leases and car loans | 5,988 | 5,239 | ||||||
Short-term portion of loans | 4,219 | 3,750 | ||||||
Total current liabilities | 43,303 | 36,471 | ||||||
Long-term liabilities | ||||||||
Long-term portion of capital leases and car loans | 6,515 | 5,303 | ||||||
Long-term portion of loans, net | 65,208 | 66,616 | ||||||
Revolving credit facility, net | 19,114 | 24,516 | ||||||
Long-term pharma contract liability | 522 | 283 | ||||||
Deferred income tax liability, net | 6,594 | 6,688 | ||||||
Total long-term liabilities | 97,953 | 103,406 | ||||||
Total liabilities | 141,256 | 139,877 | ||||||
Commitments and contingencies - see Note J | ||||||||
Redeemable convertible preferred stock | ||||||||
Series A Redeemable Convertible Preferred Stock, $0.001 par value, (50,000,000 shares authorized; 6,864,000 shares issued and outstanding) | 35,471 | 32,615 | ||||||
Stockholders' equity | ||||||||
Common stock, $0.001 par value, (250,000,000 shares authorized; 80,568,453 and 80,462,574 shares issued and outstanding, respectively) | 81 | 80 | ||||||
Additional paid-in capital | 232,039 | 230,030 | ||||||
Accumulated other comprehensive income | 499 | 274 | ||||||
Accumulated deficit | (60,074 | ) | (58,422 | ) | ||||
Total stockholders’ equity | 172,545 | 171,962 | ||||||
Total liabilities, redeemable convertible preferred stock and stockholders' equity | $ | 349,272 | $ | 344,454 |
For the Three Months Ended March 31, | |||||||
2018 | 2017 (as adjusted) | ||||||
NET REVENUE | |||||||
Clinical testing | $ | 56,971 | $ | 52,907 | |||
Pharma Services | 6,452 | 4,521 | |||||
Total Revenue | 63,423 | 57,428 | |||||
COST OF REVENUE | 36,120 | 34,480 | |||||
GROSS PROFIT | 27,303 | 22,948 | |||||
Operating expenses: | |||||||
General and administrative | 17,067 | 17,018 | |||||
Research and development | 956 | 862 | |||||
Sales and marketing | 6,775 | 5,648 | |||||
Total operating expenses | 24,798 | 23,528 | |||||
INCOME (LOSS) FROM OPERATIONS | 2,505 | (580 | ) | ||||
Interest expense, net | 1,486 | 1,364 | |||||
Other income | (63 | ) | — | ||||
Income (loss) before taxes | 1,082 | (1,944 | ) | ||||
Income tax (benefit) expense | 438 | (779 | ) | ||||
NET INCOME (LOSS) | 644 | (1,165 | ) | ||||
Deemed dividends on preferred stock | 1,003 | 894 | |||||
Amortization of preferred stock beneficial conversion feature | 1,853 | 1,672 | |||||
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ | (2,212 | ) | $ | (3,731 | ) | |
NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS | |||||||
Basic | $ | (0.03 | ) | $ | (0.05 | ) | |
Diluted | $ | (0.03 | ) | $ | (0.05 | ) | |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | |||||||
Basic | 80,507 | 78,650 | |||||
Diluted | 80,507 | 78,650 |
For the Three Months Ended March 31, | ||||||||
2018 | 2017 (as adjusted) | |||||||
NET INCOME/LOSS | $ | 644 | $ | (1,165 | ) | |||
OTHER COMPREHENSIVE INCOME, NET OF TAX: | ||||||||
Foreign currency translation adjustments | (124 | ) | — | |||||
Gain on effective cash flow hedge | 623 | — | ||||||
Total other comprehensive income, net of tax | 499 | — | ||||||
COMPREHENSIVE INCOME (LOSS) | $ | 1,143 | $ | (1,165 | ) |
For the Three Months Ended March 31, | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | 2018 | 2017 (as adjusted) | ||||||
Net income (loss) | $ | 644 | $ | (1,165 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation | 3,633 | 3,979 | ||||||
Amortization of intangibles | 1,413 | 1,725 | ||||||
Amortization of debt issue costs | 113 | 110 | ||||||
Gain on sale of assets | (7 | ) | — | |||||
Non-cash stock based compensation | 1,624 | 1,130 | ||||||
Changes in assets and liabilities, net: | ||||||||
(Increase) decrease in accounts receivable, net of write-offs | 2,299 | (5,741 | ) | |||||
(Increase) decrease in inventories | (41 | ) | 283 | |||||
(Increase) in prepaid expenses | (1,990 | ) | (1,321 | ) | ||||
(Increase) decrease in other current assets | (158 | ) | 6 | |||||
Increase (decrease) in accounts payable, accrued and other liabilities | 6,782 | (692 | ) | |||||
Net cash provided by (used in) operating activities | 14,312 | (1,686 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Purchases of property and equipment | (4,666 | ) | (3,007 | ) | ||||
Net cash used in investing activities | (4,666 | ) | (3,007 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Advances from revolving credit facility, net | — | 5,006 | ||||||
Repayment of capital lease obligations, loans | (1,394 | ) | (1,263 | ) | ||||
Repayment of term loan and revolving credit facility, net | (6,338 | ) | (932 | ) | ||||
Issuance of common stock | 483 | 505 | ||||||
Payments of equity issue costs | — | (112 | ) | |||||
Net cash (used in) provided by financing activities | (7,249 | ) | 3,204 | |||||
Effects of foreign exchange rate changes on cash and cash equivalents | (45 | ) | — | |||||
Net change in cash and cash equivalents | 2,352 | (1,489 | ) | |||||
Cash and cash equivalents, beginning of period | 12,821 | 12,525 | ||||||
Cash and cash equivalents, end of period | $ | 15,173 | $ | 11,036 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Interest paid | $ | 1,396 | $ | 1,257 | ||||
Income taxes paid | $ | 7 | $ | 5 | ||||
Supplemental disclosure of non-cash investing and financing information: | ||||||||
Equipment acquired under capital lease/loan obligations | $ | 3,355 | $ | 1,898 |
December 31, 2017 | |||||||||||
As Reported | Impact of Adoption | As Adjusted | |||||||||
Other current assets | $ | 4,241 | $ | 912 | $ | 5,153 | |||||
Other assets | 689 | 202 | 891 | ||||||||
Total Assets | $ | 343,340 | $ | 1,114 | $ | 344,454 | |||||
Accrued expenses and other liabilities | $ | 6,144 | $ | 1,406 | $ | 7,550 | |||||
Long-term pharma contract liability | — | 283 | 283 | ||||||||
Deferred income tax liability, net | 6,307 | 381 | 6,688 | ||||||||
Stockholders' Equity | 172,918 | (956 | ) | 171,962 | |||||||
Total Liabilities and Stockholders' Equity | $ | 343,340 | $ | 1,114 | $ | 344,454 |
For the Three Months Ended March 31, 2017 | |||||||||||
As Reported | Impact of Adoption | As Adjusted | |||||||||
Net Revenue | |||||||||||
Clinical Testing | $ | 56,690 | $ | (3,783 | ) | $ | 52,907 | ||||
Pharma Services | 4,986 | (465 | ) | 4,521 | |||||||
Total Revenue | $ | 61,676 | $ | (4,248 | ) | $ | 57,428 | ||||
Gross Profit | $ | 27,196 | $ | (4,248 | ) | $ | 22,948 | ||||
Total operating expenses | $ | 27,311 | $ | (3,783 | ) | $ | 23,528 | ||||
Loss from Operations | (115 | ) | (465 | ) | (580 | ) | |||||
Interest expense | 1,364 | — | 1,364 | ||||||||
Income tax (benefit) expense | (825 | ) | 46 | (779 | ) | ||||||
Net Loss | $ | (654 | ) | $ | (511 | ) | (1,165 | ) |
March 31, | December 31, | ||||||
2018 | 2017 | ||||||
Current pharma contract asset | $ | 821 | $ | 541 | |||
Long-term pharma contract asset | 140 | 31 | |||||
Total pharma contract asset | $ | 961 | $ | 572 | |||
Current pharma capitalized commissions | $ | 436 | $ | 371 | |||
Long-term pharma capitalized commissions | 213 | 171 | |||||
Total pharma capitalized commissions | $ | 649 | $ | 542 | |||
Current pharma contract liability | $ | 2,193 | $ | 1,406 | |||
Long-term pharma contract liability | 522 | 283 | |||||
Total pharma contract liability | $ | 2,715 | $ | 1,689 |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Clinical Services: | ||||||||
Client direct billing | $ | 38,530 | $ | 33,630 | ||||
Commercial Insurance | 10,326 | 11,436 | ||||||
Medicare and Medicaid | 8,084 | 7,818 | ||||||
Self-Pay | 31 | 22 | ||||||
Total Clinical Services | $ | 56,971 | $ | 52,906 | ||||
Pharma Services: | 6,452 | 4,521 | ||||||
Total Revenue | $ | 63,423 | $ | 57,427 |
March 31, 2018 | ||||||||||||||
Amortization Period | Cost | Accumulated Amortization | Net | |||||||||||
Customer Relationships | 156 - 180 months | $ | 85,068 | $ | 12,336 | $ | 72,732 | |||||||
Non-Compete Agreement | 36 months | 26 | 7 | 19 | ||||||||||
Total | $ | 85,094 | $ | 12,343 | $ | 72,751 |
December 31, 2017 | ||||||||||||||
Amortization Period | Cost | Accumulated Amortization | Net | |||||||||||
Customer Relationships | 156 - 180 months | $ | 85,068 | $ | 10,925 | $ | 74,143 | |||||||
Non-Compete Agreement | 36 months | 26 | 4 | 22 | ||||||||||
Trade Name | 24 months | 3,000 | 3,000 | — | ||||||||||
Total | $ | 88,094 | $ | 13,929 | $ | 74,165 |
Remainder of 2018 | $ | 4,271 | |
2019 | 5,680 | ||
2020 | 5,671 | ||
2021 | 5,671 | ||
2022 | 5,671 | ||
Thereafter | 45,787 | ||
Total | $ | 72,751 |
March 31, 2018 | December 31, 2017 | |||||||
Term Loan Facility | $ | 70,312 | $ | 71,250 | ||||
Revolving Credit Facility | 20,000 | 25,400 | ||||||
Capital leases and car loans | 12,504 | 10,542 | ||||||
Total Debt | $ | 102,816 | $ | 107,192 | ||||
Less: Debt issuance costs | (1,772 | ) | (1,768 | ) | ||||
Less: Current portion of long-term debt | (10,207 | ) | (8,989 | ) | ||||
Total Long-Term Debt, net | $ | 90,837 | $ | 96,435 |
Term Loan and Revolving Credit Facility | Capital Lease Obligations and Car loans | Total Long-Term Debt | ||||||||||
Remainder of 2018 | $ | 2,813 | $ | 4,984 | $ | 7,797 | ||||||
2019 | 5,625 | 5,206 | 10,831 | |||||||||
2020 | 5,625 | 2,722 | 8,347 | |||||||||
2021 | 76,250 | 300 | 76,550 | |||||||||
90,313 | 13,212 | 103,525 | ||||||||||
Less: Interest on capital leases | — | (709 | ) | (709 | ) | |||||||
90,313 | 12,503 | 102,816 | ||||||||||
Less: Current portion of long-term debt | (4,219 | ) | (5,988 | ) | (10,207 | ) | ||||||
Less: Debt issuance costs | (1,772 | ) | — | (1,772 | ) | |||||||
Long-term debt, net | $ | 84,322 | $ | 6,515 | $ | 90,837 |
Number of shares | Weighted average exercise price | ||||||
Options outstanding at December 31, 2017 | 6,342,526 | $ | 6.51 | ||||
Options granted | 1,720,500 | $ | 8.06 | ||||
Less: | |||||||
Options exercised | 72,500 | $ | 4.14 | ||||
Options canceled or expired | 12,500 | $ | 7.52 | ||||
Options outstanding at March 31, 2018 | 7,978,026 | $ | 6.86 | ||||
Exercisable at March 31, 2018 | 2,250,840 | $ | 5.63 |
Three Months Ended March 31, 2018 | |
Expected term (in years) | 2.0 - 4.0 |
Risk-free interest rate (%) | 2.4% |
Expected volatility (%) | 35.6% - 45.5% |
Dividend yield (%) | — |
Weighted average fair value/share at grant date | $2.78 |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Research and development expense | $ | 18 | $ | 43 | ||||
General and administrative expense | 1,606 | 1,087 | ||||||
Total stock based compensation expense | $ | 1,624 | $ | 1,130 |
For the Three-Months Ended March 31, | ||||||||
2018 | 2017 (as adjusted) | |||||||
Net revenues: | ||||||||
Clinical Services | $ | 56,971 | $ | 52,907 | ||||
Pharma Services | 6,452 | 4,521 | ||||||
Total Revenue | $ | 63,423 | $ | 57,428 | ||||
Cost of revenue: | ||||||||
Clinical Services | $ | 31,042 | $ | 30,700 | ||||
Pharma Services | 5,078 | 3,780 | ||||||
Total Cost of Revenue | $ | 36,120 | $ | 34,480 | ||||
Gross Profit: | ||||||||
Clinical Services | $ | 25,929 | $ | 22,207 | ||||
Pharma Services | 1,374 | 741 | ||||||
Total Gross Profit | $ | 27,303 | $ | 22,948 | ||||
Operating expenses: | ||||||||
General and administrative | $ | 17,067 | $ | 17,018 | ||||
Research and development | 956 | 862 | ||||||
Sales and marketing | 6,775 | 5,648 | ||||||
Total operating expenses | 24,798 | 23,528 | ||||||
Income (Loss) From Operations | 2,505 | (580 | ) | |||||
Interest expense, net | 1,486 | 1,364 | ||||||
Other income | (63 | ) | — | |||||
Income (loss) before taxes | 1,082 | (1,944 | ) | |||||
Income tax (benefit) expense | 438 | (779 | ) | |||||
Net Income (Loss) | $ | 644 | $ | (1,165 | ) |
a) | Cytogenetics - the study of normal and abnormal chromosomes and their relationship to disease. It involves looking at the chromosome structure to identify changes from patterns seen in normal chromosomes. Cytogenetic studies are often utilized to answer diagnostic, prognostic and predictive questions in the treatment of hematological malignancies. |
b) | Fluorescence In-Situ Hybridization (“FISH”) - a branch of cancer genetics that focuses on detecting and locating the presence or absence of specific DNA sequences and genes on chromosomes. FISH helps bridge abnormality detection between the chromosomal and DNA sequence levels. The technique uses fluorescent probes that bind to only those parts of the chromosome with which they show a high degree of sequence similarity. Fluorescence microscopy is used to visualize the fluorescent probes bound to the chromosomes. FISH can be used to help identify a number of gene alternations, such as amplification, deletions, and translocations. |
c) | Flow cytometry - a rapid way to measure the characteristics of cell populations. Cells from peripheral blood, bone marrow aspirate, lymph nodes, and other areas are labeled with selective fluorescent antibodies and analyzed as they flow in a fluid stream through a beam of light. The properties measured in these antibodies include the relative size, relative granularity or internal complexity, and relative fluorescence intensity. These fluorescent antibodies bind to specific cell surface antigens and are used to identify malignant cell populations. Flow cytometry is typically performed in diagnosing a wide variety of leukemia and lymphoma neoplasms. Flow cytometry is also used to monitor patients through therapy to determine whether the disease burden is increasing or decreasing, otherwise known as minimal residual disease monitoring. |
d) | Immunohistochemistry (“IHC”) and Digital Imaging – Refers to the process of localizing proteins in cells of a tissue section and relies on the principle of antibodies binding specifically to antigens in biological tissues. IHC is widely used in the diagnosis of abnormal cells such as those found in cancerous tumors. Specific surface cytoplasmic or nuclear markers are characteristic of cellular events such as proliferation or cell death (apoptosis). IHC is also widely used to understand the distribution and localization of differentially expressed proteins. Digital imaging allows clients to see and utilize scanned slides and perform quantitative analysis for certain stains. Scanned slides are received online in real time and can be previewed often a full day before the glass slides can be shipped back to clients. |
e) | Molecular testing - a rapidly growing cancer testing methodology that focuses on the analysis of DNA and RNA, as well as the structure and function of genes at the molecular level. Molecular testing employs multiple technologies including DNA fragment length analysis, real-time polymerase chain reaction (“RT-PCR”) RNA analysis, bi-directional Sanger sequencing analysis, and Next-Generation Sequencing (“NGS”). |
f) | Pathology consultation - services provided to clients whereby our pathologists review surgical samples on a consultative basis. NeoGenomics pathologists are some of the foremost experts on pathology in the country, and are used as experts on difficult and challenging cases. |
• | Clinical trials and research; |
• | Validation laboratory services; and |
• | Data Services |
Three Months Ended March 31, | ||||||
2018 | 2017 (as adjusted) | |||||
Net revenue | 100.0 | % | 100.0 | % | ||
Cost of revenue | 57.0 | % | 60.0 | % | ||
Gross Profit | 43.0 | % | 40.0 | % | ||
Operating expenses: | ||||||
General and administrative | 26.9 | % | 29.6 | % | ||
Research and development | 1.5 | % | 1.5 | % | ||
Sales and marketing | 10.7 | % | 9.8 | % | ||
Total operating expenses | 39.1 | % | 41.0 | % | ||
Income (loss) from operations | 3.9 | % | (1.0 | )% | ||
Interest expense, net | 2.3 | % | 2.4 | % | ||
Other income | (0.1 | )% | — | % | ||
Income (loss) before income taxes | 1.7 | % | (3.4 | )% | ||
Income tax expense (benefit) | 0.7 | % | (1.4 | )% | ||
Net income (loss) | 1.0 | % | (2.0 | )% |
Three Months Ended March 31, | |||||||||||||||
2018 | 2017 (as adjusted) | $ Change | % Change | ||||||||||||
Clinical testing | $ | 56,971 | $ | 52,907 | $ | 4,064 | 8 | % | |||||||
Pharma Services | 6,452 | 4,521 | 1,931 | 43 | % | ||||||||||
Total Revenue | $ | 63,423 | $ | 57,428 | $ | 5,995 | 10 | % |
For the Three-Months Ended March 31, | |||||||||||
Clinical Genetic Operation: | 2018 | 2017 (as adjusted) | % Change | ||||||||
Requisitions received (cases) | 105,229 | 94,528 | 11.3 | % | |||||||
Number of tests performed | 178,794 | 155,567 | 14.9 | % | |||||||
Average number of tests/requisition | 1.70 | 1.65 | 3.0 | % | |||||||
Total clinical genetic testing revenue | $ | 56,971 | $ | 51,329 | 11.0 | % | |||||
Average revenue/requisition | $ | 541 | $ | 543 | (0.3 | )% | |||||
Average revenue/test | $ | 319 | $ | 330 | (3.4 | )% | |||||
Cost of revenue | $ | 31,042 | $ | 28,915 | 7.4 | % | |||||
Average cost/requisition | $ | 295 | $ | 306 | (3.6 | )% | |||||
Average cost/test | $ | 174 | $ | 186 | (6.6 | )% |
Three Months Ended March 31, | |||||||||||
Consolidated | 2018 | 2017 (as adjusted) | $ Change | ||||||||
Cost of revenue: | |||||||||||
Clinical Services | $ | 31,042 | $ | 30,700 | 1.1 | % | |||||
Pharma Services | 5,078 | 3,780 | 34.3 | % | |||||||
Total Cost of Revenue | $ | 36,120 | $ | 34,480 | 4.8 | % | |||||
Cost of revenue as a % of revenue | 57.0 | % | 60.0 | % | |||||||
Gross Profit: | |||||||||||
Clinical Services | $ | 25,929 | $ | 22,207 | 16.8 | % | |||||
Pharma Services | 1,374 | 741 | 85.4 | % | |||||||
Total Gross Profit | $ | 27,303 | $ | 22,948 | 19.0 | % | |||||
Gross Profit Margin | 43.0 | % | 40.0 | % |
Three Months Ended March 31, | |||||||||||||||
($ in thousands) | 2018 | 2017 (as adjusted) | $ Change | % Change | |||||||||||
General and administrative | $ | 17,067 | $ | 17,018 | $ | 49 | — | % | |||||||
As a % of revenue | 26.9 | % | 29.6 | % |
Three Months Ended March 31, | |||||||||||||||
($ in thousands) | 2018 | 2017 | $ Change | % Change | |||||||||||
Research and development | $ | 956 | $ | 862 | $ | 94 | 10.9 | % | |||||||
As a % of revenue | 1.5 | % | 1.5 | % |
Three Months Ended March 31, | |||||||||||||||
($ in thousands) | 2018 | 2017 | $ Change | % Change | |||||||||||
Sales and marketing | $ | 6,775 | $ | 5,648 | $ | 1,127 | 20.0 | % | |||||||
As a % of revenue | 10.7 | % | 9.8 | % |
Three Months Ended March 31, | ||||||||
(in thousands, except per share amounts) | 2018 | 2017 (Adjusted) | ||||||
Net loss available to common shareholders | $ | (2,212 | ) | $ | (3,731 | ) | ||
Basic weighted average shares outstanding | 80,507 | 78,650 | ||||||
Effect of potentially dilutive securities | — | — | ||||||
Diluted weighted average shares outstanding | 80,507 | 78,650 | ||||||
Basic net loss per share | $ | (0.03 | ) | $ | (0.05 | ) | ||
Diluted net loss per share | $ | (0.03 | ) | $ | (0.05 | ) |
• | Interest expense – The capital structure of companies significantly affects the amount of interest expense incurred. This expense can vary significantly between periods and between companies. In order to compare performance between periods and companies that have different capital structures and thus different levels of interest obligations, NeoGenomics excludes this expense. |
• | Income tax expense (benefit) – The tax positions of companies can vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and the provision for income taxes can vary considerably among companies. In order to compare performance between companies, NeoGenomics excludes this expense (benefit). |
• | Depreciation expense – Companies utilize assets with different useful lives and use different methods of both acquiring and depreciating these assets. These differences can result in considerable variability in the costs of productive assets and the depreciation and amortization expense among companies. In order to compare performance between companies, NeoGenomics excludes this expense. |
• | Amortization expense – The intangible assets that give rise to this amortization expense relate to acquisitions, and the amounts allocated to such intangible assets and the terms of amortization vary by acquisition and type of asset. NeoGenomics excludes these items to provide a consistent basis for comparing operating results across reporting periods, pre and post-acquisition. |
• | Stock-based compensation expenses – Although stock-based compensation is an important aspect of the compensation paid to NeoGenomics employees and consultants, the related expense is substantially driven by changes in the |
• | Moving expenses – These expenses include costs associated with the move of our Irvine, California facility into our Aliso Viejo facility. Irvine was the former NeoGenomics laboratory in Southern California and was eight miles from Clarient’s much larger facility in Aliso Viejo. After investing in updating and redesigning the Aliso Viejo facility, we combined the two facilities in March of 2017. Equipment had to be moved and re-validated in the new location. There was also significant overtime and investment of resources to coordinate the move project. Our Irvine, California lease terminated on April 30, 2017 and we also incurred costs in cleaning out and restoring that facility to its original state. We are adjusting for these costs in Adjusted EBITDA as the move was the direct result of the Clarient acquisition and will not be an annually recurring item. Without adjusting for these expenses, the Company believes it would be difficult to compare financial results from operations across reporting periods on a consistent basis. |
For the Three Months Ended March 31, | ||||||||
(in thousands) | 2018 | 2017 (as adjusted) | ||||||
Net income (loss) (GAAP) | $ | 644 | $ | (1,165 | ) | |||
Adjustments to net income (loss): | ||||||||
Interest expense, net | 1,486 | 1,364 | ||||||
Income tax expense (benefit) | 438 | (779 | ) | |||||
Amortization of intangibles | 1,413 | 1,725 | ||||||
Depreciation | 3,633 | 3,979 | ||||||
EBITDA | $ | 7,614 | $ | 5,124 | ||||
Further Adjustments to EBITDA: | ||||||||
Facility moving expenses | — | 351 | ||||||
Non-cash, stock-based compensation | 1,624 | 1,130 | ||||||
Adjusted EBITDA (non-GAAP) | $ | 9,238 | $ | 6,605 |
Three Months Ended March 31, | ||||||||
2018 | 2017 (as adjusted) | |||||||
Net cash provided by (used in): | ||||||||
Operating activities | $ | 14,312 | $ | (1,686 | ) | |||
Investing activities | (4,666 | ) | (3,007 | ) | ||||
Financing activities | (7,249 | ) | 3,204 | |||||
Net change in cash and cash equivalents | 2,352 | (1,489 | ) | |||||
Cash and cash equivalents, beginning of period | $ | 12,821 | $ | 12,525 | ||||
Cash and cash equivalents, end of period | $ | 15,173 | $ | 11,036 | ||||
Working Capital (1), end of period | $ | 44,468 | $ | 49,404 |
EXHIBIT NO. | DESCRIPTION | |
10.1 | ||
31.1 | ||
31.2 | ||
32.1 | ||
101 | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, (iv) the Consolidated Statements of Comprehensive Income (Loss) and (v) related notes |
Date: May 8, 2018 | NEOGENOMICS, INC. | |||
By: | /s/ Douglas M. VanOort | |||
Name: | Douglas M. VanOort | |||
Title: | Chief Executive Officer | |||
By: | /s/ Sharon A. Virag | |||
Name: | Sharon A. Virag | |||
Title: | Chief Financial Officer | |||
May 8, 2018 | /s/ Douglas M. VanOort | |
Douglas M. VanOort | ||
Chief Executive Officer |
May 8, 2018 | /s/ Sharon A. Virag | |
Sharon A. Virag | ||
Chief Financial Officer |
Date: May 8, 2018 | /s/ Douglas M. VanOort | |
Douglas M. VanOort | ||
Chief Executive Officer | ||
Date: May 8, 2018 | /s/ Sharon A. Virag | |
Sharon A. Virag | ||
Chief Financial Officer | ||
Document and Entity Information - shares |
3 Months Ended | |
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Mar. 31, 2018 |
May 04, 2018 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | NEOGENOMICS INC | |
Entity Central Index Key | 0001077183 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 80,617,016 | |
Trading Symbol | NEO |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
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Statement of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation | $ 44,024 | $ 40,530 |
Redeemable Convertible Preferred Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Redeemable Convertible Preferred Stock, shares authorized | 50,000,000 | 50,000,000 |
Redeemable Convertible Preferred Stock, shares issued | 6,864,000 | 6,864,000 |
Redeemable Convertible Preferred Stock, shares outstanding | 6,864,000 | 6,864,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 80,568,453 | 80,462,574 |
Common stock, shares outstanding | 80,568,453 | 80,462,574 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2018 |
Mar. 31, 2017 |
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Statement of Comprehensive Income [Abstract] | ||
NET INCOME/LOSS | $ 644 | $ (1,165) |
OTHER COMPREHENSIVE INCOME, NET OF TAX: | ||
Foreign currency translation adjustments | (124) | 0 |
Gain on effective cash flow hedge | 623 | 0 |
Total other comprehensive income, net of tax | 499 | 0 |
COMPREHENSIVE INCOME (LOSS) | $ 1,143 | $ (1,165) |
Nature of Business and Basis of Presentation |
3 Months Ended |
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Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Basis of Presentation | Nature of Business and Basis of Presentation NeoGenomics, Inc., a Nevada corporation (the “Parent” or the “Parent Company”), and its subsidiaries, NeoGenomics Laboratories, Inc., a Florida corporation (“NeoGenomics Laboratories”), Clarient Inc. and its wholly-owned subsidiary Clarient Diagnostic Services, Inc. (“Clarient”), NeoGenomics Bioinformatics, Inc. and NeoGenomics Europe, SA (collectively referred to as “we”, “us”, “our”, “NeoGenomics”, or the “Company”), operates as a certified “high complexity” clinical laboratory in accordance with the federal government’s Clinical Laboratory Improvement Act, as amended (“CLIA”), and is dedicated to the delivery of clinical diagnostic services to pathologists, oncologists, urologists, hospitals, and other laboratories as well as providing clinical trial services to pharmaceutical firms. The accompanying interim consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. These accompanying consolidated financial statements include the accounts of the Parent and its subsidiaries. All intercompany transactions and balances have been eliminated in the accompanying consolidated financial statements. Certain information and footnote disclosures normally included in the Company’s annual audited consolidated financial statements and accompanying notes have been condensed or omitted in these accompanying interim consolidated financial statements. Accordingly, the accompanying interim consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 13, 2018. The results of operations presented in this quarterly report on Form 10-Q are not necessarily indicative of the results of operations that may be expected for any future periods. In the opinion of management, these unaudited consolidated financial statements include all adjustments and accruals, consisting only of normal, recurring adjustments that are necessary for a fair statement of the results of all interim periods reported herein. The Company reports its activities in two operating segments; the Clinical Services Segment and the Pharma Services Segment. These reportable segments deliver testing services to hospitals, pathologists, oncologists, clinicians, pharmaceutical firms and researchers and represent 100% of the Company’s consolidated assets, net revenues and net income (loss) for each period ended March 31, 2018 and December 31, 2017. For further financial information about these segments see Note K. |
Recently Adopted and Issued Accounting Guidance |
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Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recently Adopted and Issued Accounting Guidance | Recently Adopted and Issued Accounting Guidance Adopted In May 2014, the FASB issued ASU 2014-09, which amends FASB Accounting Standards Codification by creating Topic 606, Revenues from Contracts with Customers. This standard update calls for a number of revisions in the revenue recognition rules. The Company adopted this ASU on January 1, 2018 using a full retrospective method of adoption. Under this method, the Company has restated its results for each prior reporting period presented as if ASC 606 had been effective for those periods. The adoption of this standard required us to implement new revenue policies, procedures and internal controls related to revenue recognition. In addition, the adoption resulted in enhanced financial statement disclosures surrounding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. For further details, see Note C. The new standard impacts each of our two reportable segments differently due to the transactional nature of the Clinical Services Division versus the generally long-term nature of our Pharma Services Division contracts. The specific effect on our reportable segments is explained below: Clinical Testing Revenue Under the new standard, substantially all of our bad debt expense, which has historically been presented as part of general and administrative expense, is considered an implicit price concession and is reported as a reduction in revenue. As a result of ASC 606, we reported a material cumulative reduction in clinical revenue from previously reported periods and a similar reduction in general and administrative expenses. Pharma Testing Revenue The adoption of ASC 606 also resulted in changes to the timing of revenue recognition related to Pharma Services contracts as certain individual deliverables such as study setup fees, for which revenue was previously recognized in the period when the deliverables were completed and invoiced, will be recognized over the remaining performance period under the new standard. Additionally, certain costs to obtain contracts, primarily for sales commissions, are capitalized when incurred and are amortized over the term of the contract. Under ASC 606, the Company is required to make estimates of the total transaction price per contract, including estimates of variable consideration and the number of performance obligations, and recognize the estimated amount as revenue as it transfers control of the product or performance obligations to its customers. The estimation of total transaction price, number of performance obligations, variable consideration and the application of the related constraint, was not required under previous GAAP and requires the use of significant management judgment and estimates. The Company elected certain practical expedients as allowed under the standard including the following: contracts that began and ended within the same annual reporting period were not restated; contracts with variable consideration were estimated using the transaction price at the date the contract was completed; contract modifications that occurred prior to earliest reporting period have not been retrospectively restated but have rather been reflected as an aggregate adjustment in the earliest reporting period. The cumulative effect of this standard did not result in a material change to our Pharma Services revenue. ASC 606 Adoption Impact to Previously Reported Results We adjusted our condensed consolidated financial statements from amounts previously reported due to the adoption of ASC 606. Select condensed consolidated balance sheet line items, which reflect the adoption of ASC 606, are as follows (in thousands):
Select unaudited condensed consolidated statement of operations line items, which reflect the adoption of ASC 606, are as follows (in thousands):
In May 2017 the FASB issued ASU 2017-09, Compensation – Stock Compensation. This standard provides guidance related to the scope of stock option modification accounting, to reduce diversity in practice and reduce cost and complexity regarding existing guidance. This update is effective for annual periods beginning after December 15, 2017. The Company adopted this standard on January 1, 2018. The adoption of this standard did not have an impact on the consolidated financial statements. In January 2017 the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other: Simplifying the Test for Goodwill Impairment. This standard eliminates Step 2 of the goodwill impairment test. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This update is effective for annual and interim periods beginning after December 15, 2019. The Company early adopted this standard on January 1, 2018. The adoption of this standard did not have an impact on the consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments. This standard clarifies how specific cash receipts and cash payments are classified and presented in the statement of cash flows. This update is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. The Company adopted this standard on January 1, 2018. The adoption of this standard did not have an impact on the consolidated financial statements. Issued In August 2017 the FASB issued ASU 2017-12, Derivatives and Hedging. This standard refines hedge accounting to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. This update is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods. Early adoption is permitted. The Company does not expect the adoption of ASU 2017-12 to have a material effect on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases. The update was issued to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities, including for operating leases, on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The adoption of this ASU will result in an increase on the balance sheet for lease liabilities and right to use assets. The Company is currently evaluating the quantitative impact that adopting ASU 2016-02 will have on its consolidated financial statements and assessing any changes to its processes and controls. |
Revenue Recognition and Contractual Adjustments |
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Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition and Contractual Adjustments | Revenue Recognition and Contractual Adjustments The Company has two operating segments for which it recognizes revenue; Clinical Services and Pharma Services. Our clinical services segment provides various clinical testing services to community-based pathology practices, hospital pathology labs and academic centers with reimbursement from various payers including client direct billing, commercial insurance, Medicare and other government, and patients. Our Pharma Services segment supports pharmaceutical firms in their drug development programs by supporting various clinical trials and research. Clinical Services Revenue The Company’s specialized diagnostic services are performed based on a written test requisition form or electronic equivalent. The performance obligation is satisfied and revenues are recognized once the diagnostic services have been performed and the results have been delivered to the ordering physician. These diagnostic services are billed to various payers, including Medicare, commercial insurance companies, other directly billed healthcare institutions such as hospitals and clinics, and individuals. Revenue is recorded for all payers based on the amount expected to be collected, which considers implicit price concessions. Implicit price concessions represent differences between amounts billed and the estimated consideration the Company expects to receive based on negotiated discounts, historical collection experience and other anticipated adjustments, including anticipated payer denials. Collection of consideration the Company expects to receive typically occurs within 30 to 60 days of billing for commercial insurance, Medicare and other governmental and self-pay payers and within 60 to 90 days of billing for client payers. Pharma Services Revenue The Company’s Pharma Services Division generally enters into contracts with pharmaceutical and biotech customers as well as other CROs to provide research and clinical trial services ranging in duration from one month to several years. The Company records revenue on a unit-of-service basis based on number of units completed and the total expected contract value. The total expected contract value is estimated based on historical experience of total contracted units compared to realized units as well as known factors on a specific contract-by-contract basis. Certain contracts include upfront fees, final settlement amounts or billing milestones that may not align with the completion of performance obligations. The value of these upfront fees or final settlement amounts is usually recognized over time based on the number of units completed, which aligns with the progress of the Company towards fulfilling its obligations under the contract. The Company also enters into other contracts, such as validation studies, for which the sole deliverable is a final report that is sent to sponsors at the completion of contracted activities. For these contracts, revenue is recognized at a point in time upon delivery of the final report to the sponsor. Any contracts that contain multiple performance obligations and include both units-of-service and point in time deliverables are accounted for as separate performance obligations and revenue is recognized as previously disclosed. The Company negotiates billing schedules and payment terms on a contract-by-contract basis. While the contract terms generally provide for payments based on a unit-of-service arrangement, the billing schedules, payment terms and related cash payments may not align with the performance of services and, as such, may not correspond to revenue recognized in any given period. Amounts collected in advance of services being provided are deferred as contract liabilities on the balance sheet. The associated revenue is recognized and the contract liability is reduced as the contracted services are subsequently performed. Contract assets are established for revenue that has been recognized but not yet billed. These contract assets are reduced once the customer is invoiced and a corresponding account receivable is recorded. Additionally, certain costs to obtain contracts, primarily for sales commissions, are capitalized when incurred and are amortized over the term of the contract. Amounts capitalized for contracts with an initial contract term of twelve months or less are classified as current assets and all others are classified as non-current assets. Most contracts are terminable by the customer, either immediately or according to advance notice terms specified within the contracts. All contracts require payment of fees to the Company for services rendered through the date of termination and may require payment for subsequent services necessary to conclude the study or close out the contract. The following table summarizes the values of contract assets, capitalized commissions and contract liabilities as of March 31, 2018 and December 31, 2017 (in thousands):
There were no significant changes to the contract assets and capitalized commissions for the three months ended March 31, 2018 and related amortization for the periods presented was not significant. Pharma contract liabilities increased $1.0 million from December 31, 2017, or 61%, primarily due to an increase in volume of Pharma contracts in process. Revenue recognized for the three months ended March 31, 2018 and March 31, 2017 related to pharma contract liability balances outstanding at the beginning of the period were $0.9 million and $0.3 million, respectively. The amount of existing performance obligations under long-term contracts as defined by ASC 606, which were unsatisfied as of March 31, 2018, was $51.1 million. We expect to recognize approximately 45% of these remaining performance obligations as revenue in the next 12 months and the balance thereafter. The Company applied the practical expedient and does not disclose information about remaining performance obligations that have original expected durations of one year or less. The unsatisfied existing performance obligations under long-term contracts as defined by ASC 606 differs from backlog in that it does not include wholly unperformed contracts where the promised consideration is variable and/or the application of other practical expedients. Disaggregation of Revenue The Company considered various factors for both its Clinical Services and Pharma Services segments in determining appropriate levels of homogenous data for its disaggregation of revenue, including the nature, amount, timing and uncertainty of revenue and cash flows. For Clinical Services, the categories identified align with our type of customer due to similarities of billing method, level of reimbursement and timing of cash receipts at this level. Pharma Services revenue was not further disaggregated as substantially all of our revenue relates to contracts with large pharmaceutical and biotech customers as well as other CROs for which the nature, timing and uncertainty of revenue and cash flows is similar and primarily driven by individual contract terms. The following table details the disaggregation of revenue for both the Clinical and Pharma Services Segments (in thousands):
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill as of March 31, 2018 and December 31, 2017 was $147.0 million. There were no changes in the carrying amount of goodwill during these periods. Intangible assets as of March 31, 2018 and December 31, 2017 consisted of the following (in thousands):
We recorded approximately $1.4 and $1.7 million in straight-line amortization expense of intangible assets for the three month periods ended March 31, 2018 and 2017, respectively. The Company records amortization expense as a general and administrative expense. The estimated amortization expense related to amortizable intangible assets for each of the five succeeding fiscal years and thereafter as of March 31, 2018 is as follows (in thousands):
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The following table summarizes the long term debt at March 31, 2018 and December 31, 2017 (in thousands):
The carrying value of the Company’s long-term capital lease obligations and term debt approximates its fair value based on the current market conditions for similar instruments. Term Loan On December 22, 2016, the Company entered into a Credit Agreement with Regions Bank as administrative agent and collateral agent. The Credit Agreement provided for a $75 million term loan facility (the “Term Loan Facility”). The Credit Agreement also provides incremental facility capacity of $50 million, subject to certain conditions. On March 31, 2018 and December 31, 2017, the Company had current outstanding borrowings under the Term Loan of approximately $4.2 million and $3.8 million and long-term outstanding borrowings of approximately $65.2 million and $66.6 million, net of unamortized debt issuance costs of $0.9 million and $0.9 million, respectively. The debt issuance costs were recorded as a reduction in the carrying amount of the related liability and are being amortized over the life of the loan. The Term Loan Facility bears interest at a rate per annum equal to an applicable margin plus, at NeoGenomics Laboratories’ option, either (1)the Adjusted LIBOR rate for the relevant interest period, (2) an alternate base rate determined by reference to the greatest of (a) the prime lending rate of Regions, (b) the federal funds rate for the relevant interest period plus 0.5% per annum and (c) the one month LIBOR rate plus 1% per annum, or (3) a combination of (1) and (2). The applicable margin will range from 2.25% to 3.50% for LIBOR loans and 1.25% to 2.50% for base rate loans, in each case based on NeoGenomics Laboratories’ consolidated leverage ratio (as defined in the Credit Agreement). Interest on borrowings under the Revolving Credit Facility is payable on the last day of each month, in the case of each base rate loan, and on the last day of each interest period (but no less frequently than every three months), in the case of Adjusted LIBOR loans. The Company entered into an interest rate swap agreement to hedge against changes in the variable rate of a portion of this debt. See Note F-Derivative Instruments and Hedging Activities for more information on this instrument. The Term Loan Facility and amounts borrowed under the Revolving Credit Facility are secured on a first priority basis by a security interest in substantially all of the tangible and intangible assets of NeoGenomics Laboratories and the Guarantors. The Term Loan Facility contains various affirmative and negative covenants including ability to incur liens and encumbrances; make certain restricted payments, including paying dividends on its equity securities or payments to redeem, repurchase or retire its equity securities; enter into certain restrictive agreements; make investments, loans and acquisitions; merge or consolidate with any other person; dispose of assets; enter into sale and leaseback transactions; engage in transactions with its affiliates, and materially alter the business it conducts. In addition, the Company must meet certain maximum leverage ratios and fixed charge coverage ratios as of the end of each fiscal quarter commencing with the quarter ending March 31, 2017. The Company was in compliance with all required covenants as of March 31, 2018. The Term Loan Facility has a maturity date of December 21, 2021. The Credit Agreement requires NeoGenomics Laboratories to mandatorily prepay the Term Loan Facility and amounts borrowed under the Revolving Credit Facility with (i) 100% of net cash proceeds from certain sales and dispositions, subject to certain reinvestment rights, (ii) 100% of net cash proceeds from certain issuances or incurrences of additional debt, (iii) beginning with the fiscal year ending December 31, 2017, 50% of excess cash flow (as defined), subject to a step down to 0% of excess cash flow if NeoGenomics Laboratories’ consolidated leverage ratio is no greater than 2.75:1.0 and (iv) 100% of net cash proceeds from issuances of permitted equity securities by NeoGenomics Laboratories made in order to cure a failure to comply with the financial covenants. NeoGenomics Laboratories is permitted to voluntarily prepay the Term Loan Facility and amounts borrowed under the Revolving Credit Facility at any time without penalty. Capital Leases The Company has entered into capital leases to purchase laboratory and office equipment. These leases expire at various dates through 2021 and the weighted average interest rate under such leases was approximately 4.85% at March 31, 2018. Most of these leases contain bargain purchase options that allow us to purchase the leased property for a minimal amount upon the expiration of the lease term. The remaining leases have purchase options at fair market value. Property and equipment acquired under capital lease agreements are pledged as collateral to secure the performance of the future minimum lease payments. Revolving Credit Facility On December 22, 2016, the Company entered into a Credit Agreement with Regions Bank as administrative agent and collateral agent. The Credit Agreement provided for a $75 million revolving credit facility (the “Revolving Facility”). On March 31, 2018, and December 31, 2017, the Company had outstanding borrowings of approximately $19.1 million and $24.5 million, net of unamortized debt issuance costs of $0.9 million and $0.9 million, respectively. The Revolving Credit Facility includes a $10 million swingline sublimit, with swingline loans bearing interest at the alternate base rate plus the applicable margin. Any principal outstanding under the Revolving Credit Facility is due and payable on December 21, 2021 or such earlier date as the obligations under the Credit Agreement become due and payable pursuant to the terms of the Credit Agreement. The Revolving Facility bears interest at a rate per annum equal to an applicable margin plus, at NeoGenomics Laboratories’ option, either (1)the Adjusted LIBOR rate for the relevant interest period, (2) an alternate base rate determined by reference to the greatest of (a) the prime lending rate of Regions, (b) the federal funds rate for the relevant interest period plus 0.5% per annum and (c) the one month LIBOR rate plus 1% per annum, or (3) a combination of (1) and (2). The applicable margin will range from 2.25% to 3.50% for Adjusted LIBOR loans and 1.25% to 2.50% for base rate loans, in each case based on NeoGenomics Laboratories’ consolidated leverage ratio. Interest on the outstanding principal of the Term Loan Facility will be payable on the last day of each month, in the case of each base rate loan, and on the last day of each interest period (but no less frequently than every three months), in the case of LIBOR loans. The Credit Agreement requires NeoGenomics Laboratories to mandatorily prepay the Term Loan Facility and amounts borrowed under the Revolving Credit Facility with (i) 100% of net cash proceeds from certain sales and dispositions, subject to certain reinvestment rights, (ii) 100% of net cash proceeds from certain issuances or incurrences of additional debt, (iii) beginning with the fiscal year ending December 31, 2017, 50% of excess cash flow (minus certain specified other payments), subject to a step down to 0% of excess cash flow if NeoGenomics Laboratories’ consolidated leverage ratio is no greater than 2.75:1.0 and (iv) 100% of net cash proceeds from issuances of permitted equity securities by NeoGenomics Laboratories made in order to cure a failure to comply with the financial covenants. NeoGenomics Laboratories is permitted to voluntarily prepay the Term Loan Facility and amounts borrowed under the Revolving Credit Facility at any time without penalty, subject to customary “breakage” costs with respect to prepayments of Adjusted LIBOR rate loans made on a day other than the last day of any applicable interest period. Maturities of Long-Term Debt Maturities of long-term debt at March 31, 2018 are summarized as follows (in thousands):
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Derivative Instruments and Hedging Activities |
3 Months Ended |
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Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities In December of 2016, the Company entered into an interest rate swap agreement to reduce our exposure to interest rate fluctuations on our variable rate debt obligations. This derivative financial instrument is accounted for at fair value as a cash flow hedge which effectively modifies our exposure to interest rate risk by converting a portion of our floating rate debt to a fixed rate obligation, thus reducing the impact of interest rate changes on future interest expense. We account for derivatives in accordance with ASC Topic 815, see Note B for more information on our accounting policy related to derivative instruments and hedging activities. Under this agreement, we receive a variable rate of interest based on LIBOR, and we pay a fixed rate of interest at 1.59%. The interest rate swap agreement was effective as of December 30, 2016 and a termination date of December 31, 2019. As of March 31, 2018 and December 31, 2017, the total notional amount of the Company’s interest rate swap was $50 million. The fair value of the interest rate swap will be included in other long term assets or liabilities, when applicable. As of March 31, 2018 and December 31, 2017, the fair value of the derivative financial instrument was $0.6 million and $0.4 million which was included in the balance sheet as other assets and reflected in AOCI. The instrument will be evaluated on a monthly basis and resulting increases or decreases will be recorded as a component of AOCI and will be reclassified to interest expense in the period during which the hedged transaction affects earnings. Cash flows from the interest rate swap are to be included in operating activities on the consolidated statement of cash flows. As the specific terms and notional amounts of the derivative financial instrument match those of the fixed-rate debt being hedged, the derivative instrument is assumed to be a perfectly effective hedge and accordingly, there is no impact to the Company's consolidated statements of operations. As of March 31, 2018, the Company estimates that it will reclassify gains or losses on derivative instruments of $0.1 million from AOCI to earnings during the next twelve months as the anticipated cash flows occur. |
Class A Redeemable Convertible Preferred Stock |
3 Months Ended |
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Mar. 31, 2018 | |
Temporary Equity Disclosure [Abstract] | |
Class A Redeemable Convertible Preferred Stock | Class A Redeemable Convertible Preferred Stock On December 30, 2015, the Company issued 14,666,667 shares of its Series A Redeemable Convertible Preferred Stock ("Series A Preferred Stock") as part of the consideration for the acquisition of Clarient. The Series A Preferred Stock has a face value of $7.50 per share for a total liquidation value of $110 million. During the first year, the Series A Preferred Stock had a liquidation value of $100 million if the shares were redeemed prior to December 29, 2016. On December 22, 2016, the Company redeemed 8,066,667 shares of the Series A Preferred Stock for $55.0 million in cash. The redemption amount per share equaled $6.82 ($7.50 minus the liquidation discount of 9.09%). In December 2017, the Company issued 264,000 additional shares of Preferred Stock as a Paid-in-Kind (“PIK”) dividend, resulting in a balance of 6,864,000 shares of Series A Preferred Stock outstanding at March 31, 2018. The carrying amount of the Series A Preferred Stock at March 31, 2018 was $35.5 million as compared to the carrying amount at December 31, 2017 of $32.6 million. The increase in the carrying amount is due to the accrual of deemed dividends of approximately $0.8 million, the accretion of the beneficial conversion feature of approximately $1.9 million during the three months ending March 31, 2018 and the additional BCF discounts for payment-in-kind shares accrued during the three months ending March 31, 2018 of $0.2 million. Both the deemed dividends and the accretion of the beneficial conversion feature are recorded as distributions to the holders of the Series A Preferred Stock on the income statement with the corresponding entry recorded as an increase to the carrying value of the Series A Preferred Stock. Issue Discount The Company recorded the Series A Preferred Stock at a fair value of approximately $73.2 million, or $4.99 per share, on the date of issuance. The difference between the fair value of $73.2 million and the liquidation value of $110 million represents a discount of $36.8 million from the initial face value as a result of assessing the impact the rights and features of the instrument and their effect on the value to the Company. After the partial redemption, the Series A Preferred stock has a fair value of approximately $32.9 million, or $4.99 per share. The difference between the fair value of $32.9 million and the liquidation value of $49.5 million represents a discount of approximately $16.6 million. Beneficial Conversion Features The fair value of the common stock into which the Series A Preferred Stock is convertible exceeded the allocated purchase price fair value of the Series A Preferred Stock at the date of issuance and after redemption by approximately $44.7 and $20.1 million, respectively, resulting in a beneficial conversion feature. The Company will recognize the beneficial conversion feature as non-cash, deemed dividend to the holder of Series A Preferred Stock over the first three years the Series A Preferred Stock is outstanding, as the date the stock first becomes convertible is three years from the issue date. The amount recognized for the three months ended March 31, 2018 was approximately $1.9 million. In addition to the beneficial conversion feature (“BCF”) recorded at the original issue date, we recorded additional BCF discounts for payment-in-kind shares accrued for the quarter ended March 31, 2018 as dividends. After the early redemption, the face value of the remaining Series A Preferred Stock is $49.5 million. We will issue 274,560 additional shares of Series A Preferred Stock as payment-in-kind dividends for the year ending December 31, 2018. The additional 274,560 shares will be discounted and amortized to the income statement over the remaining period up to the earliest conversion date, which is three years from the original issue date. The additional BCF discount recorded for the three months ended March 31, 2018 was approximately $0.2 million. Automatic Conversion Each share of Series A Preferred Stock issued and outstanding as of the tenth anniversary of the original issue date will automatically convert into fully paid and non-assessable shares of common stock. Classification The Company classified the Series A Preferred Stock as temporary equity on the consolidated balance sheets due to certain change in control events that are outside the Company’s control, including deemed liquidation events described in the Series A Certificate of Designation. |
Equity |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity A summary of the stock option activity under the Company’s plans for the three months ended March 31, 2018 is as follows:
Of the 7,978,026 outstanding options at March 31, 2018, 1,180,000 were variable accounted stock options issued to non-employees of the Company of which 445,833 options were vested and 734,167 options were unvested as of March 31, 2018. The fair value of each stock option award granted during the three months ended March 31, 2018 was estimated as of the grant date using a trinomial lattice model with the following weighted average assumptions:
As of March 31, 2018, there was approximately $7.9 million of unrecognized share based compensation expense related to stock options that will be recognized over a weighted-average period of approximately 1.3 years. This includes approximately $0.9 million in unrecognized expense related to the 734,167 shares of unvested variable accounted for stock options subject to fair value adjustment at the end of each reporting period based on changes in the Company’s stock price. Stock based compensation expense recognized for stock options and restricted stock and included in the consolidated statements of operations was allocated as follows (in thousands):
Stock based compensation recorded in research and development relates to unvested options granted to a non-employee. We offer an employee stock purchase plan (“ESPP”) through which eligible employees may purchase shares of our common stock at a discount. On May 25, 2017, the Company amended the ESPP, increasing the discount from 5% to 15% of the fair market value of the Company’s common stock. As a result of this change, we have recorded stock based compensation expense related to the ESPP for the quarter ended March 31, 2018. During the three months ended March 31, 2018 and 2017, employees purchased 36,922 and 24,363 shares, respectively under the ESPP. The expense recorded for these periods was $0.1 million and $0, respectively. |
Commitments |
3 Months Ended |
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Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Commitments During the three months ended March 31, 2018, the Company entered into leases of approximately $3.4 million primarily to fund the construction of our laboratory in Houston, Texas. We anticipate this project to be complete in May 2018. These leases have 36 month terms, a $1.00 buyout option at the end of the term and interest rates ranging from 4.6% to 5.6%. The Company accounted for these leases as capital leases. |
Related Party Transaction |
3 Months Ended |
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Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transaction | Related Party Transaction During each of the three month periods ended March 31, 2018 and 2017, Steven C. Jones was an officer, director and shareholder of the Company. In connection with his duties as Executive Vice President, Mr. Jones earned approximately $46,000 and $66,000 for the three months ended March 31, 2018 and 2017, respectively. In addition, as compensation for his services on the Board, Mr. Jones earned approximately $12,500 and $12,500 for consulting work performed the three months ended March 31, 2018 and 2017, respectively. Mr. Jones also received approximately $32,000 and $85,000 during the three months ended March 31, 2018 and 2017, respectively, as payment of his annual bonus compensation for the previous fiscal years. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company reports its activities in two operating segments; the Clinical Services Segment and the Pharma Services Segment. Our Clinical customers include community based pathology practices, clinician practices, hospitals and academic centers. Our Pharma customers include pharmaceutical companies to whom we provide testing and other services to support their studies and clinical trials. In the fourth quarter of 2017, changes were made in the information provided to our Chief Operating Decision Maker (“CODM”); greater detail was provided regarding the performance of our Pharma business and our Clinical business as there was an increased focus on this financial data due to the growth of our Pharma business. Our CODM also changed the way he was using this financial information to make strategic decisions regarding allocation of resources and evaluating performance of the Company. This resulted in a change in our operating segments to align with how the CODM views our business which resulted in two operating segments; a Pharma Services segment and a Clinical Services segment. We have presented the financial information reviewed by the CODM including revenues, cost of revenue and gross margin for each of our operating segments. The segment information presented in these financial statements has been conformed to present segments on this revised basis for all prior periods. Assets are not presented at the segment level as that information is not used by the CODM. The following table summarizes segment information for the three month periods ended March 31, 2018 and 2017, respectively (in thousands).
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Recently Adopted and Issued Accounting Guidance Recently Adopted and Issued Accounting Guidance (Tables) |
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Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Adoption of New Accounting Pronouncements | Select condensed consolidated balance sheet line items, which reflect the adoption of ASC 606, are as follows (in thousands):
Select unaudited condensed consolidated statement of operations line items, which reflect the adoption of ASC 606, are as follows (in thousands):
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Revenue Recognition and Contractual Adjustments (Tables) |
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Revenue Recognition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Contract Assets and Liabilities | The following table summarizes the values of contract assets, capitalized commissions and contract liabilities as of March 31, 2018 and December 31, 2017 (in thousands):
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Summary of Disaggregation of Revenue | The following table details the disaggregation of revenue for both the Clinical and Pharma Services Segments (in thousands):
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Goodwill and Intangible Assets (Tables) |
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Classes of Intangible Assets | Intangible assets as of March 31, 2018 and December 31, 2017 consisted of the following (in thousands):
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Estimated Amortization Expense | The estimated amortization expense related to amortizable intangible assets for each of the five succeeding fiscal years and thereafter as of March 31, 2018 is as follows (in thousands):
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Debt (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Long Term Debt | The following table summarizes the long term debt at March 31, 2018 and December 31, 2017 (in thousands):
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Summary of Maturities of Long-Term Debt | Maturities of long-term debt at March 31, 2018 are summarized as follows (in thousands):
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Equity (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Activity | A summary of the stock option activity under the Company’s plans for the three months ended March 31, 2018 is as follows:
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Fair Value of Each Stock Option Award Granted | The fair value of each stock option award granted during the three months ended March 31, 2018 was estimated as of the grant date using a trinomial lattice model with the following weighted average assumptions:
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Summary of Stock-Based Compensation Expense Recognized for Stock Options and Restricted Stock Included in Consolidated Statements of Operations | Stock based compensation expense recognized for stock options and restricted stock and included in the consolidated statements of operations was allocated as follows (in thousands):
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Segment Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Segment Information | The following table summarizes segment information for the three month periods ended March 31, 2018 and 2017, respectively (in thousands).
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Nature of Business and Basis of Presentation (Detail) - segment |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of operating segments | 2 | |
Percentage of consolidated assets net revenues and net income reported by reportable operating segment | 100.00% | 100.00% |
Revenue Recognition and Contractual Adjustments - Narrative (Details) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2018
USD ($)
segment
|
Mar. 31, 2017
USD ($)
|
|
Revenue from Contract with Customer [Abstract] | ||
Number of operating segments | segment | 2 | |
Increase in contract liabilities | $ 1.0 | |
Increase in contract liabilities (as a percent) | 61.00% | |
Contract liability, revenue recognized | $ 0.9 | $ 0.3 |
Existing performance obligation unsatisfied | $ 51.1 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation expected to be recognized (as a percent) | 45.00% | |
Performance obligations expected to be satisfied, expected timing | 12 months |
Revenue Recognition and Contractual Adjustments - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Contract with Customer, Asset, Net [Abstract] | ||
Current pharma contract asset | $ 821 | $ 541 |
Long-term pharma contract asset | 140 | 31 |
Total pharma contract asset | 961 | 572 |
Capitalized Contract Cost [Abstract] | ||
Current pharma capitalized commissions | 436 | 371 |
Long-term pharma capitalized commissions | 213 | 171 |
Total pharma capitalized commissions | 649 | 542 |
Contract with Customer, Liability [Abstract] | ||
Current pharma contract liability | 2,193 | 1,406 |
Long-term pharma contract liability | 522 | 283 |
Total pharma contract liability | $ 2,715 | $ 1,689 |
Goodwill and Intangible Assets - Narrative (Detail) - USD ($) |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 147,019,000 | $ 147,019,000 | |
Changes in carrying amount of goodwill | 0 | $ 0 | |
Amortization of intangibles | $ 1,413,000 | $ 1,725,000 |
Goodwill and Intangible Assets - Classes of Intangible Assets (Detail) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 85,094 | $ 88,094 |
Accumulated Amortization | 12,343 | 13,929 |
Net | 72,751 | 74,165 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 85,068 | 85,068 |
Accumulated Amortization | 12,336 | 10,925 |
Net | $ 72,732 | $ 74,143 |
Non-Compete Agreement | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 36 months | 36 months |
Cost | $ 26 | $ 26 |
Accumulated Amortization | 7 | 4 |
Net | $ 19 | $ 22 |
Trade Name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 24 months | |
Cost | $ 3,000 | |
Accumulated Amortization | 3,000 | |
Net | $ 0 | |
Minimum | Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 156 months | 156 months |
Maximum | Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 180 months | 180 months |
Goodwill and Intangible Assets - Estimated Amortization Expense (Detail) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2018 | $ 4,271 | |
2019 | 5,680 | |
2020 | 5,671 | |
2021 | 5,671 | |
2022 | 5,671 | |
Thereafter | 45,787 | |
Net | $ 72,751 | $ 74,165 |
Debt - Summary of Long Term Debt (Detail) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Debt Instrument [Line Items] | ||
Capital leases and car loans | $ 12,504 | $ 10,542 |
Total Debt | 102,816 | 107,192 |
Less: Debt issuance costs | (1,772) | (1,768) |
Less: Current portion of long-term debt | (10,207) | (8,989) |
Total Long-Term Debt, net | 90,837 | 96,435 |
Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | 70,312 | 71,250 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 20,000 | $ 25,400 |
Derivative Instruments and Hedging Activities (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
|
Derivative [Line Items] | ||
Estimated reclassification of derivative gain (loss) from AOCI to earnings | $ 100,000 | |
Interest Rate Swaps | ||
Derivative [Line Items] | ||
Fixed rate of interest percentage payment | 1.59% | |
Total notional amount | $ 50,000,000 | $ 50,000,000 |
Fair value of derivative instrument | $ 600,000 | $ 400,000 |
Equity - Narrative (Detail) - USD ($) $ in Millions |
3 Months Ended | ||||
---|---|---|---|---|---|
May 25, 2017 |
May 24, 2017 |
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option outstanding (in shares) | 7,978,026 | 6,342,526 | |||
Stock options, granted (in shares) | 1,720,500 | ||||
Unrecognized stock-based compensation cost | $ 7.9 | ||||
Unrecognized share-based compensation expense, weighted-average recognition period (in years) | 1 year 3 months 18 days | ||||
Shares purchased by employees under ESPP | 36,922 | 24,363 | |||
Employee Stock Purchase Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Change in discount rate | 15.00% | 5.00% | |||
Stock compensation expense (gain) | $ 0.1 | $ 0.0 | |||
Non Employee | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options, granted (in shares) | 1,180,000 | ||||
Stock option vested (in shares) | 445,833 | ||||
Stock option unvested (in shares) | 734,167 | ||||
Unrecognized stock-based compensation cost | $ 0.9 |
Equity - Fair Value of Each Stock Option Award Granted (Detail) |
3 Months Ended |
---|---|
Mar. 31, 2018
$ / shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate (%) | 2.40% |
Dividend yield (%) | 0.00% |
Weighted average fair value/share at grant date (in dollars per share) | $ 2.78 |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 2 years |
Expected volatility (%) | 35.60% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 4 years |
Expected volatility (%) | 45.50% |
Equity - Summary of Stock-Based Compensation Expense Recognized for Stock Options and Restricted Stock Included in Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock based compensation expense | $ 1,624 | $ 1,130 |
Research and development expense | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock based compensation expense | 18 | 43 |
General and administrative expense | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock based compensation expense | $ 1,606 | $ 1,087 |
Commitments (Detail) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Contractual Obligation [Line Items] | ||
Capital lease obligation amount | $ 3,355,000 | $ 1,898,000 |
Laboratory And Computer Equipment | ||
Contractual Obligation [Line Items] | ||
Capital lease obligation amount | $ 3,400,000 | |
Lease term | 36 months | |
Capital leases buy out amount | $ 1 | |
Minimum | Laboratory And Computer Equipment | ||
Contractual Obligation [Line Items] | ||
Capital lease interest rate | 4.60% | |
Maximum | Laboratory And Computer Equipment | ||
Contractual Obligation [Line Items] | ||
Capital lease interest rate | 5.60% |
Related Party Transaction (Detail) - Executive Vice President - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Related Party Transaction [Line Items] | ||
Fees for performing duties | $ 46,000 | $ 66,000 |
Related party transaction compensation for services on board | 12,500 | 12,500 |
Payment of annual bonus compensation | $ 32,000 | $ 85,000 |
Segment Information (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018
USD ($)
segment
|
Mar. 31, 2017
USD ($)
|
|
Segment Reporting [Abstract] | ||
Number of operating segments | segment | 2 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 63,423 | $ 57,428 |
Cost of Revenue | 36,120 | 34,480 |
GROSS PROFIT | 27,303 | 22,948 |
General and administrative | 17,067 | 17,018 |
Research and development | 956 | 862 |
Sales and marketing | 6,775 | 5,648 |
Total operating expenses | 24,798 | 23,528 |
Income (Loss) From Operations | 2,505 | (580) |
Interest expense, net | (1,486) | (1,364) |
Other income | 63 | 0 |
Income (loss) before taxes | 1,082 | (1,944) |
Income tax (benefit) expense | 438 | (779) |
Net income (loss) | 644 | (1,165) |
Clinical Services | ||
Segment Reporting Information [Line Items] | ||
Revenues | 56,971 | 52,907 |
Cost of Revenue | 31,042 | 30,700 |
GROSS PROFIT | 25,929 | 22,207 |
Pharma Services | ||
Segment Reporting Information [Line Items] | ||
Revenues | 6,452 | 4,521 |
Cost of Revenue | 5,078 | 3,780 |
GROSS PROFIT | $ 1,374 | $ 741 |
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