NeoGenomics Closes $150 Million Senior Credit Facility

FT. MYERS, Fla., Dec. 22, 2016

The Company borrowed $97.9 million at closing, including $75 million of term debt and $22.9 million under the revolver.  The proceeds of this facility combined with approximately $16 million of cash were used to retire the existing $54.6 million term loan, redeem 8,066,667 shares of Series A Redeemable Preferred Stock held by an affiliate of General Electric Company for $55 million, and to pay certain fees and expenses.   Amounts drawn under this new facility bear interest according to a pricing grid that is based on the ratio of debt to Adjusted EBITDA (as defined in the credit agreement), and is currently equal to LIBOR + 300 basis points, which compares with LIBOR + 700 basis points under the previous term loan.    

The new credit facility was jointly led by Regions Capital Markets, a division of Regions Bank; Merrill Lynch, Pierce, Fenner & Smith, Inc. and Wells Fargo Securities, LLC.  Regions Bank served as Administrative Agent and Bank of America, N.A. and Wells Fargo Bank, N.A. served as Co-Syndication Agents.  Hancock Bank, The Huntington National Bank and PNC Bank, N.A. served as Co-Documentation Agents.  Cadence Bank N.A., Franklin Synergy Bank and Seaside National Bank and Trust also are participating lenders in this new facility.  Stephens Inc. advised NeoGenomics in the transaction.

Douglas M. VanOort, the Company's Chairman and CEO, commented, "We are very pleased to have executed this new bank facility.  It has allowed us to redeem 55% of the Series A Preferred Stock resulting from our acquisition of Clarient one year ago and reduce our Adjusted Diluted Shares outstanding by 8.5%.  This facility also reduces our weighted average cost of senior debt capital to roughly half the previous level.  As a result, we expect only minimal increases in 2017 interest expense despite the higher principal outstanding.  In addition, we now have $52 million available under the revolving credit facility to pursue strategic opportunities.  We look forward to working with our new bank syndicate as we continue to grow NeoGenomics into the leading cancer testing Lab in the world." 

Full-Year 2016 Financial Outlook:

As a result of delays in recognizing approximately $2 million of Pharma Services revenue in Quarter 4, NeoGenomics also revised its guidance today for fiscal year 2016.  The Company now expects consolidated revenue to be approximately $244 - 246 million (previously $245 - $250 million), Adjusted EBITDA⁽¹⁾ to be approximately $34 - 36 million (previously $36 - $38 million), Adjusted Net Income⁽¹⁾ to be approximately $12 - $14 million (previously $13 - 15 million) and Adjusted Diluted EPS⁽¹⁾ to be approximately $0.13 - $0.15 per share (previously $0.14 - $0.16 per share).  The Company also now expects GAAP Diluted EPS to be a loss of ($0.30) - ($0.28) per share (previously ($0.28) - ($0.27)) before taking into consideration any one-time transaction fees and other non-cash expenses associated with refinancing the existing credit facility, which are expected to be approximately $3.9 million.

The Company reserves the right to adjust this guidance at any time based on the ongoing execution of its business plan.  Current and prospective investors are encouraged to perform their own due diligence before buying or selling any of the Company's securities, and are reminded that the foregoing estimates should not be construed as a guarantee of future performance.