Precipio Reduces Product Revenue Result Needed for Cash Flow Breakeven
September 25 2023 - 11:00AM
Specialty cancer diagnostics company Precipio,
Inc. (NASDAQ: PRPO) announced that due to the increased
pathology revenue, and the recent operational efficiencies, the
company has reduced the revenue required from the products division
to reach breakeven from $8M to $6M annually, or $1.5M per quarter,
25% below previous estimates. This means that the company
anticipates reaching cash flow breakeven
sooner.
Three key factors
drive this positive change:
- Increased Pathology revenues. As
previously announced, the company has exceeded its target for
pathology revenues, meeting its goal of a $14M run rate in August,
4 months earlier than planned. As this business continues to grow
with September revenues also expected to exceed the breakeven
point, and becomes a cash generating division, this positively
impacts the company’s overall breakeven calculation.
- Improved gross margins. Alongside
the increased revenues in the pathology business, scale economies
within the lab lead to improved gross margins. This means that each
dollar of revenue contributes a higher percentage to the bottom
line, bringing the company closer to cash flow breakeven.
- Impact of cost reduction
initiatives. As more of the cost reduction initiatives begin to
impact company operations and cash, breakeven revenue targets are
further reduced.
The remaining driver
for breakeven is product revenues. As a result of the above
factors, the threshold for product revenues required to bring the
company to cash flow breakeven is lower, and management believes
that, at the current pace, it will be able to reach financial
independence with its existing cash reserves.
“It is gratifying to
see the team’s effort yield such promising financial results for
our business. Although we are still confident that we will reach
and exceed the original targets for product revenue, it’s great to
know that the goal of financial independence is becoming more
attainable every day,” said Ilan Danieli, CEO. “The fruits of our
hard work are beginning to show, and I am confident that this is
just the beginning of the company turning the page and delivering
promising results to our shareholders.”
About Precipio
Precipio has built a platform designed to
eradicate the problem of misdiagnosis by harnessing the intellect,
expertise and technology developed within academic institutions and
delivering quality diagnostic information to physicians and their
patients worldwide, as well as proprietary products that serve
laboratories worldwide. Through its collaborations with world-class
academic institutions specializing in cancer research, diagnostics
and treatment, Precipio offers a new standard of diagnostic
accuracy enabling the highest level of patient care. For more
information, please visit www.precipiodx.com.
Please follow us on LinkedIn, Twitter
@PrecipioDx and on Facebook.
Forward-Looking Statements
This press release contains “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, including, among others, including other
financial projections and potential market opportunity, plans and
prospects. Except for historical information, statements about
future volumes, sales, growth, costs, cost savings, margins,
earnings, earnings per share, diluted earnings per share, cash
flows, plans, objectives, expectations, growth or profitability are
forward-looking statements based on management’s estimates,
beliefs, assumptions and projections. Words such as “could,” “may,”
“expects,” “anticipates,” “will,” “targets,” “goals,” “projects,”
“intends,” “plans,” “believes,” “seeks,” “estimates,” “predicts,”
and variations on such words, and similar expressions that reflect
our current views with respect to future events and operational,
economic and financial performance, are intended to identify such
forward-looking statements. These forward-looking statements are
only predictions, subject to risks and uncertainties, and actual
results could differ materially from those discussed. We caution
investors not to place undue reliance on the forward-looking
statements contained in this press release. You are encouraged to
read our filings with the SEC, available at www.sec.gov, for a
discussion of these and other risks and uncertainties Important
factors that could affect performance and cause results to differ
materially from management’s expectations, or could affect the
company’s ability to achieve its strategic goals, includes factors
that are described in the sections entitled “Risk Factors” and
“Management’s Discussion and Analysis” in the company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2022, as
updated from time to time in the company’s Securities and Exchange
Commission filings. The company’s forward-looking statements in
this press release are based on management’s current views,
beliefs, assumptions and expectations regarding future events and
speak only as of the date of this release. The company undertakes
no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by the federal securities
laws.
Inquiries:
investors@precipiodx.com
+1-203-787-7888 Ext. 523
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