Precipio (PRPO) 13 Nov 192019 Q3 Earnings call transcript

Welcome to the Precipio Third Quarter 2019 Commercial Update Call. All participants will be listen-only mode. [Operator Instructions] Please note that the conference is being recorded.

Now, let me hand the call over to Miri Radomski, Precipio’s In-House Counsel. Please go ahead.

Ben. you, Thank Good afternoon. contain call statements our this about forward-looking during business. made Statements

assumptions place You our forward-looking and to undue statements uncertainties. not risks current are and significant as forecasts upon on based reliance should subject are these expectations, and statements

that that by be or Risks are Commission. believe, should, in is our these with anticipate, as materially such Securities the Form factors as on XX-K predict, detailed risk not terms cause negative terms for of potential, meaning. Commission forecast, the could or and other These could, Exchange identified Securities statements the may, risks uncertainties forth are results intend, and at words on under expect, file include Exchange of actual reports statements similar to December limited and those as words which from may the the listed year in well subsequent other our plan, XXXX, report estimate, www.sec.gov. matters in forward-looking with will, our any available annual ended These filings continue to XX, or differ set

required we an and the date unless information, events forward-looking including only a information law. of speak is as obligation result by earlier as publicly undertake not or to new date future statements including indicated. provided are Statements or information, any they forward-looking otherwise And to do any statements update statements, except whether

let Now conference the to CEO. me hand Precipio's over Ilan,

everyone the to time good Thank taking you, connect Miri, and thank afternoon for you and today.

with company’s points out here opportunity result had address take our and of most few so full thoughts high the third we of some at our he'll I the go well. through yet, and quarter as know the CFO, I released a of Q. coming is the Iberger, us wanted share saw, and to filed our probably you to just time all to As you this probably haven't a Carl level report results. the XX-Q discuss

are point lower first The which quarter. prior revenues, the than our to discuss is

are result. My with why that everyone few this me by temporary is this want the lower. drop comfortable are to of a we share trend. saying Let with you start get this is to not a quarter the goal reasons our with happy not revenues I and only a fact

me begin our your To revenue position. of our historically comprised discussing comp been revenue memory, Let by has two main refresh components.

pathology sent our The is services by patient’s diagnosis. us oncologists first from to for generated specimens revenue

the The customer becomes us new onboarding The us customers, for business go to but continues each that their month develops base, are generating company of a customers, consistent down use growth up revenue a send because large from by continuous typically has each driven month revenue customer month been recurring individual to who the consistently, business. growing revenue as can and customer.

our That's by achieved is existing adding while new And customers the so, pretty growth straightforward. keeping one.

and will company because We company they're samples or is conduct. second of from rate, or pharma, proceed to these send can from predictable business. our run is lab element projects and the acquisition The the patient The revenue require which part of far pharma return any based a of revenue At This hired some The on phases other it's to pharma results. then a archives. phase. repositories less next based whether projects that often the various trial clinical project pharmaceutical analyze intervals will the so the recruitment would results samples company predictable in stop of us A is batch of there a start is these them. come Most to samples. or other pharma various source to the projects that the a of be on less has conducting. it is company studies

business a QX, to our happened pathology QX they we continued be because were working while in revenues no back pharma back we the on will during some the so and to and into QX. project bounce see generate we up of make in us. In much virtually had we revenue those expect a phase already revenues grow, pharma Coming business to when didn't for come QX, in lost

The the down. slow was second reason summer

in this For whatever a reason, our particularly decline sharp saw pathology summer and August, volume. we in

declines back new unchanged part in sharp customers, case some of we QX, customers of average. customer volume and to and of seen on almost saw for pathology existing our our a base our volume In customers however, our we substantial base revenues. the by also the volume the remains we've And declined for Although continue with increased grow many already with summer. QX has our in certain XX% customer bounce therefore, above a October vacation

focused our HemeScreen. Lastly, and IV-cell products: management projects – was on advancing technology

and its I As item revenue line company and pathology services. BXB collections said from very sales the one that's DSO. very, a the add predictable. long to time reimbursement you in is susceptible diversify to revenue lead the customer, or product And or to revenue it's revenues, strategic and once Unlike past, pharma of or goals the not third get products of a

predictable is and Furthermore, relatively lab lab as degree accuracy. high of the a relatively so are to with consistent usage product purchases

the customers their Deck to as On as aim Hands many as as pipeline much get everyone front an of and to a in sleeves products possible, approach took these All rolled build we possible. company as of So up

customers. it convert funnel target begins in and any customers, prospects, process, sales meetings of converted that with and presentations those As trials a into into

of and our and and And thoroughly some our labs incorporated are both with onboarding in products South the trialing use products all in QX, shared labs want it. well results we we now IV-cell products. Novamed labs customer to we labs for to major us generating internationally The I that results as in ready with substantial we and introduce other of adequate our you still work is as have revenue Novamed moving have America to as the in Asia And our validation. by tested for assure produced the ensured We've capacity yes, for towards forward our media are scale spectacular. domestically first will work We've orders. with the to product completing and both company up the time.

We believe the continue to to that driver going for going company this substantial a growth is forward. be

to the myself, that said Having with causes, including pleased we're this the thorough that, the so doesn't identify not team, happen and members conducted quarter for of results analysis have a again. the

a doubt not company QX with in growth long soon these demonstrate and seeds must this numbers, continue offer our words, and year fruits and the fruits in are show our We their planted that. lasting. to lot a will particular have no be that to very will I

over it some come for for and some Now, to Carl back let additional thoughts. Carl? closing I'll me comments hand

joining Thank you call, requirements. Iberger, and I On you, Ilan. our Financial am cover call I'll today's Chief shareholders Precipio’s Good for Carl performance our our operating afternoon today. filing, thank cash and to Officer. XX-Q

noted, Marcum and First, the Consistent company filed XX-Q SEC have from as quarterly our a and today. the with with audit is clean review LLP. completed Ilan we filing prior reporting,

operating discussed our revenue to and Ilan front, revenue. his remarks, Moving QX the on in on performance

year-to-date were months ending prior the quarter While a nine lower QX and by for the on more favorable million of XXXX XX%. reported $X.X nine from was the months QX basis XXXX, revenues our revenue to

projected XX% that to and and attracting were through point, XX% Ilan's expectations a our higher. a reporting were year-over-year increase While August. we forecast increase We to

However, of the we month in fell short September.

decreased and as patient testing certain accounts. decrease referrals revenue a key farmer Our of other a ordering accounts result in from several

have patterns in ordering rebounded September, with disappointed While QX.

profit Moving their CLIA are on to present, current operating difficult did level at appropriately our to in a allow Both CAP volumes realize variable expenses costs. and to gross economies fixed operate is it show lab not because improvement lab. At certified of us diagnostic required and functioning scale. testing to

and Simply manage put, of operating at constant months. as industry last turnaround. over staffed to have taken lab are But lab a level appropriate the whole, provide standard effort costs XX remained an we the

today improve. our XX% our volume volumes that to heals excess before margins costs. do we will capacity. XX% could Estimates approaching margins. have That increase revenue grow, variable dollar incremental XX% just a adding stands to we testing Each absorb As are

of expenses, with operating and the of category, salary, reporting and efficiencies business expenses, turn expenses our expenses. invest federal amortization. Moving professional a development tax savings, outsourcing expenses consist of onto expenses and reductions consists reduction operating we filings business. state travel, locked fees, reporting, and yield facility both R&D, In operating and our our look G&A Once marketing, operating cost and we've non-recurring our legal, The operating IT, business public and general sales, strides through and By depreciation expanding been changes in public management. make business in sales, Key legal, in process in operating fees. section continually cost company's have costs, on to R&D. we the activities These external and systems. demonstrate initiatives recurring reductions

During increase investments ordering sales orders sales QX both our business Board States. analytics show sales increase and and Currently have covers QX, been expanding we results in our across that account. per seeing our upgrading force Early team accounts the of and activities. development our general XX are our an and new a

and HemeScreen. and front We've On believe upon the I touched IV-cell commercialized Ilan R&D this.

contributions trials. have in significant of process been Expectations in stops regarding there clinical initial these our have evaluation Well some operating for estimation elongated losses. clinical XXXX, and and revenue starts the completion remain

the XX, September the in of and securing around company offs period million associated and a million reported is in turning million business and the for a $X.X as equivalent Off the ending the For the loss development $X.X $X.X sales, public write million $X.X XXXX Goodwill. to three of was impact XXXX. and The of $X.X net investing months expense net R&D. net then remaining compared change, million reductions with reporting legal in

operating and stepping a expenses whole. back company's viewing So the as

on and During have reduced to million estimate between the company focus areas We we in reductions initiatives. public annual XXX certain G&A X.X XXXX reporting. spending its successfully enabled growth to have that in

forward reductions in will Moving overall additional believe evident quarters. expenses reporting public or future be we

expand and relied and on company investor requirements, business, to its the Turning financing. new and cash grow cash to sales. develop The revenues our from generated cash products has

are as XXXX. million We of of September XXth December of from consumer year-end hand an million. Cash increase a the X.X on today. $X.X cash This is was

contracts the generating breakeven inked combined HemeScreen management reach with and research continued cash forward, expenses to growth cash, in of cash additional new revenue, be revenues current flow newly clinical and product form will IV-cell that during diagnostic XXXX. managing in sufficient Going believes testing balances,

turn I'll And for over some now to call the Ilan remarks. back closing

Okay.

Thank I'd made commitments our the to like we've of fellow to you, reiterate some Carl. shareholders.

to we First, growth. are committed

the reap our and doing company it's in we're of While has patients. going that long-term has a so bumps. I what that be they delivers, this numbers, can believes it when shareholder lower base that to show rewards the in quarter know didn't there their road Every commitment,

We growth. this overcome how we are strong continuing committed team face path and knows we have of a that to any down bumps to

Second, our before, fiscal As extremely I've continue said we to to commitment manage responsibility? our carefully. is cash

hopefully that will of of when not when share it cap. to As where if the committed as a and remain our company's when some to Carl towards it our of and has diluted need conducting any will compared shareholders. raise don't manage the company is to market how we raised profitability, the price that shared want so capital We're be relatively business. we necessarily We we our small capital to point driving capital raise the be the elements finances substantial

a patient part by gets we to so care. the and about that what every of proud deeply I'm commitment us bed do, team be cares a cause to morning. our of who and Lastly, inspired out

think you important constantly stakeholders: us build company the of to disease part that patients an is We our be and vision our about exciting the organization mission we're valuable employees, with clinical base meaningful, that to sharing of are this and customers, continuously as And to battling all have and shareholders. ride and scariest a privileged in we of value growing, it business. such to to brings the shareholder to privileged committed our healthcare. meaningful a communicate our I

key vision success. required common work ingredient achieve is the to to us unites that continued This the hard

product of I've quarter past The the terms over product in to labs interest. a developed is can a has better that substantial such provide immediate almost This as there tells goes that as me un-refuted. has as we've well operational need impact market IV-cell. Over The for discuss personally visited dozen need clinical a response and products clearly and value. clear virtually been unanimous

first product, on few As with the track any sales major toughest, confident success. are but the always the we're right to I'm

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conference you presentation. for Thank is concluded. now today's The attending

now may disconnect. You