Precipio Achieves Key Q4-2024 Financial Goals: Positive Adjusted EBITDA and Positive Cash Flow (unaudited)

Rhea-AI Summary

Precipio (NASDAQ: PRPO) has achieved two significant financial milestones in Q4-2024, demonstrating progress toward financial independence. The company reported positive Adjusted EBITDA of $0.4M and a cash flow increase of $0.3M (unaudited).

Of the cash flow improvement, $75,000 came from directors' fees paid in stock, with the remainder from operations. The company's pathology service division is now generating sufficient positive cash flow to fund ongoing R&D and investment in the high-value product business.

Management acknowledges potential quarterly fluctuations between positive and negative performance, particularly noting Q1 challenges due to insurance deductible renewals. However, with current cash reserves and growth pipeline, the company believes it's positioned to achieve sustained profitability.

Positive

• Achieved positive Adjusted EBITDA of $0.4M in Q4-2024
• Generated positive cash flow of $0.3M in Q4-2024
• Pathology division now self-sustaining and funding R&D
• No longer dependent on external capital

Negative

• Expected revenue fluctuations in Q1 2025 due to insurance deductibles
• Future quarters may fluctuate between positive and negative performance

Both metrics demonstrate the ability to achieve financial independence

NEW HAVEN, Conn., Feb. 25, 2025 (GLOBE NEWSWIRE) -- Specialty cancer diagnostics company Precipio, Inc. (NASDAQ: PRPO), announces that it has achieved two important financial goals in the last quarter of 2024:

1. Positive Adjusted EBITDA – Precipio reports (unaudited) Adjusted EBITDA of $0.4M for Q4-2024. Adjusted EBITDA is a non-GAAP metric that comprises EBITDA, less non-cash stock-based compensation expense and other significant or non-operating (income) or expenses. Please see a detailed explanation at the bottom of this press release.
   
   
2. Positive Cash flow. Precipio reports an (unaudited) increase of $0.3M in cash during Q4-2024. Of this improvement, $75,000 was due to directors’ fees paid in stock; the balance is cash flow from operations.
   

The combination of these two factors demonstrates the Company’s ability to achieve and sustain financial independence by generating enough positive cash flow from its pathology service division to fund ongoing R&D as well as continued, consistent investment in growing the high value product business. Management notes that the financial performance in future quarters may fluctuate from positive to negative due to various factors. One such occurrence may occur in Q1 when pathology business revenues and cash receipts are typically reduced by renewed insurance deductibles. Prior years’ experience indicates operating results will not be affected by these factors nearly as much in Q2.

However, with the Company’s current cash reserves and growth pipeline, management believes it is on track to turn the corner and become a profitable company.

“Ending 2024 with these financial results is an important step for our company. While we may still face the ups and downs as we grow the business, it is evident that our company can translate business growth into positive financial outcomes, and build the value its shareholders deserve to have,” said Ilan Danieli, CEO. “Managing a company that no longer relies on outside capital infusions for its survival enables us to make decisions based on growth and value creation without the constraints imposed by cash conservation concerns. We can focus on building capabilities and channeling them towards developing our products and growing the business. We are on track to have an exciting year for our company.”

EBITDA and Adjusted EBITDA Reconciliation and Explanation

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a non-GAAP financial measure that is widely used to evaluate operational performance and pre-tax profitability. Management believes Adjusted EBITDA provides investors with a useful perspective on the company’s financial health, particularly where non-cash amortization has an important impact on profitability.

Adjusted EBITDA as we define it will also exclude the non-cash costs of employee stock options and unusual, one-time costs. This is the first time we are reporting Adjusted EBITDA and we intend to continue reporting it in future quarters.  

Below is a reconciliation of Net Income, EBITDA and Adjusted EBITDA for the fourth quarter of 2024:

($ in millions, unaudited)	Q4-2024
Net income/(loss) (GAAP)	$(0.3)
Adjustments to net income/(loss):
Interest expense, net	$0
Income taxes	$0
Depreciation	$0.1
Amortization of intangibles	$0.2
EBITDA (non-GAAP)	$0
Further Adjustments to EBITDA
Stock-based compensation expense	$0.4
Other significant (income) expenses	$0
Adjusted EBITDA (non-GAAP)	$0.4

About Precipio

Precipio is a healthcare biotechnology company focused on cancer diagnostics. Our mission is to address the pervasive problem of cancer misdiagnoses by developing solutions in the form of diagnostic products and services. Our products and services deliver higher accuracy, improved laboratory workflow, and ultimately better patient outcomes, which reduce healthcare expenses. Precipio develops innovative technologies in our laboratory where we design, test, validate, and use these products clinically, improving diagnostic outcomes. Precipio then commercializes these technologies as proprietary products that serve the global laboratory community and further scales Precipio’s reach to eradicate misdiagnosis.

Availability of Other Information About Precipio

For more information, please visit the Precipio website at https://www.precipiodx.com/ or follow Precipio on X (formerly Twitter) (@PrecipioDx) and LinkedIn (Precipio) and on Facebook. Investors and others should note that we communicate with our investors and the public using our company website (https://www.precipiodx.com), including, but not limited to, company disclosures, investor presentations and FAQs, Securities and Exchange Commission filings, press releases, public conference call transcripts and webcast transcripts, as well as on X and LinkedIn. The information that we post on our website or on X or LinkedIn could be deemed to be material information. As a result, we encourage investors, the media and others interested to review the information that we post there on a regular basis. The contents of our website or social media shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

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. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding the targets set herein and related timing. Except for historical information, statements about future volumes, sales, growth, costs, cost savings, margins, earnings, earnings per share, diluted earnings per share, cash flows, adjusted EBITDA, plans, objectives, expectations, growth or profitability and our potential to reach financial independence 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 based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the important factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and our other reports filed with the U.S. Securities and Exchange Commission. Any such forward-looking statements represent management’s estimates as of the date of this press release only. While we may elect to update such forward-looking statements at some point in the future, except as required by law, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

FAQ

What financial milestones did Precipio (PRPO) achieve in Q4 2024?

Precipio achieved positive Adjusted EBITDA of $0.4M and increased cash flow by $0.3M in Q4 2024.

How much of PRPO's Q4 2024 cash flow improvement came from operations?

Of the $0.3M cash flow improvement, $225,000 came from operations while $75,000 was from directors' fees paid in stock.

What challenges does Precipio (PRPO) expect in Q1 2025?

PRPO expects potential reduced pathology business revenues and cash receipts due to renewed insurance deductibles in Q1.

How will PRPO's Q4 2024 results impact its dependency on external capital?

The results indicate PRPO can operate independently without relying on outside capital infusions, allowing focus on growth and value creation.