Precipio Reduces Product Revenue Result Needed for Cash Flow Breakeven
Higher pathology revenues and lower cost structure drive down product revenue breakeven point from $8M to $6M
NEW HAVEN, Conn., Sept. 25, 2023 (GLOBE NEWSWIRE) -- 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.
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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.
CONTACT: Inquiries: investors@precipiodx.com +1-203-787-7888 Ext. 523
