NeoGenomics(NEO) - 2021 Q4 - Annual Report

Financial Performance - Consolidated revenue increased by 9.0% compared to 2020, with Clinical Services revenue up by 5.7% and Pharma Services revenue up by 29.1%[227] - Total net revenue increased by $39.9 million, or 9.0%, from $444.4 million in 2020 to $484.3 million in 2021[258] - Clinical Services revenue rose by $21.8 million, or 5.7%, to $404.2 million in 2021, despite exiting COVID-19 PCR testing[258][259] - Pharma Services revenue increased by $18.0 million, or 29.1%, to $80.2 million in 2021, driven by research studies and informatics[260] - The net loss for 2021 was $8.3 million, compared to a net income of $4.2 million in 2020[323] - Basic net loss per share was $0.07, down from a net income per share of $0.04 in the previous year[323] - Total assets increased to $1.87 billion in 2021, up from $988.3 million in 2020, reflecting a growth of 89.3%[321] - Total liabilities also rose to $761.5 million, compared to $294.0 million in 2020, marking an increase of 158.5%[321] - Stockholders' equity increased to $1.11 billion in 2021, up from $694.3 million in 2020, representing a growth of 60.0%[321] Expenses and Costs - Gross profit margin decreased from 41.8% in 2020 to 38.6% in 2021, primarily due to amortization of acquired technology intangibles[264] - General and administrative expenses surged by $77.6 million, or 53.9%, to $221.3 million in 2021, reflecting acquisition costs and increased personnel[266] - Research and development expenses increased significantly by $13.6 million, or 165.8%, to $21.9 million in 2021, focusing on new test development[268] - Sales and marketing expenses rose by $14.7 million, or 30.8%, to $62.6 million in 2021, attributed to higher commissions and expanded sales team[270] - Cost of revenue increased by 15.0% to $297.3 million in 2021, influenced by higher payroll and amortization costs[263] Cash Flow and Financing - Cash used in operating activities was $26.7 million in 2021, which included $15.7 million of acquisition and integration costs and $53.4 million in depreciation and amortization[281] - Cash used in investing activities increased to $632.4 million in 2021, primarily due to $419.4 million for acquisitions and $133.8 million in marketable securities[283] - Cash provided by financing activities was $725.3 million in 2021, significantly higher than $235.6 million in 2020, driven by $408.1 million from equity offerings and $334.4 million from convertible debt[284] - The company had $316.8 million in cash and cash equivalents and $198.6 million in marketable securities as of December 31, 2021, sufficient to support operational liquidity needs for at least the next 12 months[285] Acquisitions and Investments - Acquired Trapelo and Inivata, adding liquid biopsy platform technology and MRD testing capabilities to the oncology testing portfolio[227] - The acquisition of Inivata Limited was completed on June 18, 2021, with a business enterprise value of $552.8 million and a Purchase Option recorded at fair value of $74.3 million[311] - The acquisition of Trapelo Health on April 7, 2021, involved a total purchase consideration of $64.8 million, including cash of $35.6 million and equity valued at $29.2 million[406] - The estimated goodwill from the Trapelo acquisition is approximately $44.7 million, primarily due to expected synergies and the acquisition of an assembled workforce[409] - The Company recorded a gain of $109.3 million for the year ended December 31, 2021, related to the acquisition of Inivata, including a measurement period adjustment of $17.8 million[415] Operational Developments - Transitioned the majority of testing in Fort Myers to a new headquarters and laboratory facility, enhancing capacity for future growth[227] - Plans to expand test offerings, including advanced NGS tools, and continue global expansion in Europe and Asia[224] - Focus on developing informatics and data-related tools to assist stakeholders in identifying patients for clinical trials[225] - Aims to drive down testing costs through investments in information technology and automation[226] Regulatory and Compliance - The company is committed to providing transparency and choice to patients regarding their data handling and use[241] - The company reported a reserve of $11.2 million in long-term liabilities related to a regulatory matter concerning compliance with federal healthcare laws[316] - The financial statements were audited and presented fairly in all material respects as of December 31, 2021, in accordance with U.S. GAAP[302] Market and Economic Factors - The company has operations in multiple countries, exposing it to foreign currency exchange risks, but does not currently hedge these risks[297] - Inflation has not materially affected the business in the past, but ongoing inflationary pressures could negatively impact future financial results[294] - The company does not expect a significant change in its uncertain tax positions related to Federal and State R&D tax credits in the next 12 months[396]