PRPO - Earnings call transcript Q3 2017

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Operator

Good morning, and welcome to the Precipio Earnings Conference Call for the Third Quarter ended September 30, 2017. [Operator Instructions] Participants of this call are advised that the audio of this conference call is being recorded for playback purposes. An audio replay of the call will be available on Precipio’s website in the Investor Relations section approximately one day after the end of the call. I would now like to turn the conference over to Mr. Scott Gordon, President of CORE IR, the Company’s Investor Relations firm. sir. ahead, go Please

Scott Gordon

today Thank released Precipio’s for results corporate ended quarter CFO. XX, With third Philip. and September Precipio’s call Iberger, ended results Carl for today’s for to quarter Precipio’s us XXXX. XX, discuss developments Precipio, September Ilan you you, Danieli, joining CEO; Inc. all Yesterday, conference the are financial Thank XXXX. and third financial the

page received not earnings please at Precipio’s www.precipiodx.com. investor's If you have visit release, the

prepared any events, statements and factors, management’s differ Company Ilan Litigation Securities that to today, cause of with XXXX. results anticipated Securities Danieli, XX-Q results, would, to cause forward-looking or All time-to-time differ a will, statements. risks, call change Before forward-looking CEO intend, in I statements, the uncertainties, Precipio. constitute this Company's this from would now statements call Any November reform and on include everyone materially begin filed and conference we from uncertainties future differ XX, as Act by within of those Securities risks, statements and should Form the Company's the statements It in materially performance including plans to could, prior required update and Federal results any remind to is is the remarks, go the for my The and anticipate, may the of actual XXXX as that filings undertake Precipio in XXXX. please may, meaning other certain conference on November filings from forward-looking could with plan, law. of relating from introduce factors. known the like prospects Laws similar including the materially of in not those Commission. information statements statements Factors report in ahead. The predict, statements forward-looking and words and to could within meaning other in pleasure containing constitute Private projected Company’s recent Ilan forward-looking results the expressions factors these such various of result duty to actual in unless this those information quarterly XX, does Exchange and such Company's subsequent described in the

Ilan Danieli

post everyone, you, AP liability and joining thank months over for QX to day Scott. A X.X little faced day one balance completed of us Company the merger we results this morning ago, financing, full start Good our quarter. of discuss a the merger sheet. you Thank XXXX, it’s before our it On massive the quarter. first just required on one,

Omaha planned raise revamping capital we've that first million. for balance a $X debt, our our Our AP pleased you into it be reduced we and with to significant restructured a that morning, towards viability. a We've significant CLIA This significant $X Company re-launched and sheet XX% Company's we raise its the long-term step success. completed Laboratory recovery could was operation needed targeted into financial Precipio to of a be top-up towards million, first and Company up $X.X and the completed shoring by approximately these out August, product to In subsequent challenges. of a million had made these determining and the over overcoming of I'm portion Haven, positioning for recently positioning progress market. the long-term share viability Overcoming New in was relocated the before challenges

in Omaha Haven into lab XX,XXX facility. have laboratory successfully Our completed the New schedule on square foot the staff transfer of our facility

we've more make most for PCR outcome approached because the knew before. the October, validation as all team pharma This was the solution because time, a first tremendous you project. importantly one worked leading concern robust to schedule, lung they she $XXX,XXX answer We have six it us begin her the ICP launched that lab it's one experience we of technology. in gave weeks to she PCR asked cancer sent we technology. evaluating discussions revenue. using we and we going as doing of attempted onboarding which is share that time with laboratory We’re simple at of as returned implementation announced with ICP. acquiring, if because other executed setup she ICE-COLD what a and one work biopsy in the has the market. excited I'd Two technology promise knew with we and this that way, been our their know our now and money the recent competitors lot help and new to how for from of using hard the in ICP successful liquid experience. Methodist ICP in was and revamped a reported customers’ platforms, of won lab and biopsy were liquid ICP Healthcare The with to liquid When flexible, previously They Methodist, of yield ICP the frame other it's ICE-COLD merger, you development she same wasn't properly, to orders final it could my their are assist years, to ICP to we our positive very felt outcome. achieved work. and also done, customer our now its the I merger. new running, the spend ago, we enables me like the the our why selected in of is early up a diligence, When a stages them In since techs past we laboratory. customer At the never new bringing was and on kit chose that their Precipio’s our more it terms platform. in was and to of have in-house were their select a our to members, our R&D to customers biopsy market When voiced tech adaptability folks time honest We up of onboarding, five we the the potential of

rewarding. However, actually there's nothing customers like product it a launch the That seeing who around excitement success product was produce team the a able and the of to that created extremely want. was

Now having said many growing of ahead in still company. challenges are us there that, the

of commercial team we've this recognize always been so customers collaboration valuable demonstrated the to and all member could we of our first proud believe market our business, role waiting played bringing sell Like we've and is have the in designing, that making success. and customers. works PCR, won From our toughest to we to the developing, in However, work and who've fantastic that teams R&D to promise every customers. directors beginning. see not this the of critical for any board And between and a to single to a our truly in and close engaged the happen, have accomplished shareholders To a who ICE-COLD this those several is your need. I'd product This customer a is hard the I'm product experienced is our without moment investors been to dedication take team. our them. of first like

enter to to by of surprise. to moments of we customer why pipeline work decided many that's growing determined discuss we take what second raise a I have into ahead base caught few We the I want a lot capital us to into which to convert know and have we're do. a the

Our in expected original budget call need. XX% for gross of our the plan in capital in announced million raised results $X million back We as $X on surface August. which proceeds, and we

the nobody the effectively company plan. our considering execute need all with with However, from our costs position that the top as our retired, transaction, We with foot target left This never The XX% additional we on off than than capital provided of the debt perspective our raise well would today. subsequent the brakes on a less associated proceeds raise. with were from has better an net meant the in is we something operational we as to believe that it wants. operate after been needed to us

ways. hand results of for financial were last versus Furthermore, and to relative highlights. Carl financial financial Precipio results over considered like is of of the pre-merger. This his much presentation the compared entity call year's the of financial and third the LLC, comparison metrics negatively should now apples-to-apples comparison before I'd post-merger the review in in not quarter of really for private that context. the XXXX, a financial Lastly, in merger two that to Precipio QX Inc. an be of of I is impacted metrics of point XXXX the that of public entity QX out to

that associated not future QX merger. They ongoing and during there business are numbers. of will First, our part which one-time costs are occurred impact were with significant not the

The second attention. impact merger the on of management was

half consumed As properly the to the attention leading management the to XXXX on during first focus with not we the and of up before, I business. itself mentioned was merger, transaction were able

and margin of hit perspective. a from role a impacted and involvement significant including and profit that subsequent the myself, sales net and development the gross in took our management’s revenue business Given QX business

attention from to AP company return we I right raise restructuring position post-merger point. be very place grow the growing in that that there. the Carl, that management some then grow behind team at Now to business. as majority results be Iberger, can on Precipio’s for CFO of capital require still will to have refocus integration us after and that closing continue at with a where and in additional It's us, won’t some to however, the discussion Carl you. remarks. QX, introduce were immediate that we now will can get back we demonstrate with financials our the in the financials. and will I different the over do believe point pleasure capital our to the on The the we my feel,

Carl Iberger

you, decrease to sales ending good is XX% XXXX. the $XXX,XXX the a for reported XXXX. during decrease in Thank months as The ended operating the due decrease revenues and XX, Net million $XXX,XXX, results period Ilan months or focus compared were by of quarter morning. in to to Reviewing same a September million XX, $X.X September Cost resulting the XX, cases XX, three $X.X during ended of XX% the XXXX reviewed. from increased as XXXX. three has Ilan for management just in processed on September merger goods compared or the ended as September months the three XXXX

the personnel of transition the in the due to facility the company CLIA compared in period to additional as to several Omaha preparation New previous same hired in increase our Connecticut. for staffing in additional As XXXX, laboratory is Haven work

associated that kits services in decreased largely exceeding to period margins quarter is ended revenue XXXX were to was a during lines follows; months margin shows We to have our the lower profit levels to XXXX. believe fixed net gross the near Both and that gross sales revenues during the sales, the of associated XX% profit to strong above product our future, as million XXXX laboratories. in due gross gross exceed quarter costs same Moving of return we three will point total like I’d out the costs to gross and by operating profit, $X.X facility of gross and XX%. the spread third ICP and as gross fixed the gross pathology total negative discussed margins operate margins. during due decreased same our XX% margin that compared XXXX, September compared over lab the to The with XX, in change net in volume. in

The in increase of The post-merger. operating the and audit, ended increased advisory the attributed one-time million related other combining legal, organization’s to in to the operating Moving XXXX. fees two to expenses reflects months the period merger September expenses. costs XX, the professional expenses as in to million with organizations same the compared operating company’s and associated $X.X three $X.X XXXX, by expenses during to increase

our from includes resulted as operating intangibles XXXX increased for million. a loss in of three XXXX represent that quarter $X.X merger increases compared due the related our to related $X.X as as development, transfer production months to summary, $X.X September In and from cash our tests, relocating operations ended expenses debt initiatives to our manage the compared for to the million has the are recapitalization the all recapitalize and acquired and million quarter. company. and that of expenses approximately third build expense million the $X.X ability to lab QX of approximately net general Other company amortization interest and Additional for accelerate $X was expenses million expense R&D of in the to of $X.X interest during ended flow, increase the in bridge Merger The costs debt, of is sales issuance interest debt and public notes provided XX, September non-recurring during expenses. to Net those and convertible conversion administrative expansion. the $X.X is million and company, to our expenses restructure amortized expense and market result discounts developments into of XXXX XXXX, to mostly million, payment QX were XX, XXXX. force loss, XXXX to a one-time, of quarter increase

CEO, for Ilan I’d to the final like Ilan? call Now our over to remarks. some Danieli turn back

Ilan Danieli

to if investor you’ll summary, contract. main do. the and milestones as our goals well we our existing growth. laid delivered we’ve plant will that financial From the From it see you financing at said a as an relocating executed we new of adequately to and we and lab further near-term, we were our In our financed require Carl. next our you, we’ve company winning call year our look standpoint, discussion goals, perspective, of what to although on successfully reopening continue is previous going on from out businesses, to Thank as facilitate operational the restarting both the believe

product the products recovery for to the we’ve again have solid line team, like successful we both the and I’d today. coupled Lastly, repositioned obtained was return from we domestically and joining orders, revamped strong a and the new customers, PCR launched to for of cleanup everyone the turning offering, growth. ICE-COLD have towards I revenue and we standpoint, continue a of feel QX internationally. and company and a hard work ingredients with need, quarter, and commercial where first thank corner. us will the

and achievements We’re focus for to you, continued time continuing report in that the delivering to our shareholders. and support. to look And future excited lasting on represents about we to promise months. the value the your again you our achieving on our loyal shareholder and Precipio forward Thank coming

forward to Thank engaging intend announcing number coming in of conferences in the of also will be the - you as accordingly. We you months, we We events a investor details and look participate which proceed. you. to with we

Operator

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

You may disconnect. now

Scott Gordon	President-CORE IR
Ilan Danieli	Chief Executive Officer
Carl Iberger	Chief Financial Officer

Precipio (PRPO) 21 Nov 172017 Q3 Earnings call transcript