DarioHealth Reports Fourth Quarter And Year End 2016 Results
CAESAREA, Israel, March 22, 2017 /PRNewswire/ -- DarioHealth Corp. (NASDAQ: DRIO), a leading global digital health company with mobile health and big data solutions, today reported financial and operational results for the three and twelve month period ended December 31, 2016.
2016 Highlights
- Record revenues of $2.8 million, increased 241% compared to the full year 2015
- Sequential quarterly revenue growth throughout the entire year
- Direct-to-consumer model launched in U.S. with approximately 18,500 Dario Blood Glucose Monitoring System devices sold; accelerated in 2nd half of year with approximately 14,000 sold
- Direct-to-consumer model launched in Australia and Canada
- Nasdaq listing in March
- Commenced investment discussions with OurCrowd Qure, an Israeli Digital Health Specialized Fund; subsequently closed in early 2017
Fourth Quarter Highlights
- Record revenues of $838,000, increased 172% compared to the fourth quarter of 2015
- Sequential quarterly revenue growth of 15% over third quarter of 2016
- 67% of quarterly revenues derived from test strips and other consumables
- Record 8,500 Dario Blood Glucose Monitoring System devices sold in the U.S.; 55% growth from third quarter of 2016
- Consumable strips growth of 67% over third quarter of 2016
- Nearly 95% of U.S. users have ordered test strips
2017 Outlook
In 2017, DarioHealth expects sales to accelerate while reducing overall customer acquisition cost upon execution of insurance reimbursement coverage options for U.S. consumers, an increase in the percentage of higher-margin recurring consumable revenue, and an expansion of the platform availability to include Android, which has been submitted to the FDA.
Chairman and CEO of DarioHealth, Erez Raphael, commented, "Our vision and focus allowed us to achieve a great deal over the last year, and has placed us in an advantageous position for further growth and market penetration for our Dario all-in-one smart glucose monitor and data platform. Our direct-to-consumer strategy in the U.S., launched mid-year, yielded the majority of our sales in this region, and continued to accelerate in the fourth quarter."
"We are encouraged by the fact we delivered on increased device sales, significant monthly user growth and established a predictable stream of high margin recurring subscription revenues from new customers. Furthermore, we are excited by the positive engagement we are achieving with our users, expect user growth to accelerate in 2017, and see revenue growth to continue in each sequential quarter, as it has grown until now."
Full Year 2016 Results Summary
For the twelve months ended December 31, 2016, revenues were $2.8 million, a 241% increase from $823,000 for the twelve months ended December 31, 2015.
Revenues generated during the year ended December 31, 2016 were derived mainly from the sales of Dario's components, including the Smart Meter itself, through direct sales to consumers located mainly in the U.S. through the Company's on-line store and through distributors. The increase in revenues is attributable to additional commercialization and launch of sales in 2016.
Gross loss decreased by $25,000 to a loss of $830,000 in the twelve months ended December 31, 2016, as compared to a $855,000 gross loss in the twelve months ended December 31, 2015.
Gross loss includes onetime items amounting to $496,000, of which $376,000 derived mainly from the impairment of a production line and related inventory in the U.S. due to its high manufacturing costs, and $120,000 resulted from loss of inventory, due to weather conditions in one of our U.S. warehouses, which we expect to be compensated for during 2017.
Operating loss for the twelve months ended December 31, 2016 increased by $3.4 million to $11.1 million, as compared to a $7.7 million operating loss in the twelve months ended December 31, 2015.
We recorded in our financial expenses, warrant revaluation expenses of $1.4 million in the fourth quarter of 2016, as a result of reclassifying warrants issued to investors in March and August of 2016 as a "Liability related to Warrants," due to its exercise price protection feature. The exercise price protection feature expired on March 8, 2017, and as a result, the liability related to these warrants will be reclassified back to stockholders' equity in the first quarter of 2017, while recording related financing income of $7.4 million in the first quarter of 2017.
Net loss attributable to holders of common stock increased by $3.7 million to $10.9 million in the twelve months ended December 31, 2016, as compared to $7.1 million in the twelve months ended December 31, 2015.
The increases in operating loss and net loss were mainly due to the increase in expenses on digital marketing campaigns primarily in the U.S. after the Company commenced sales in the U.S. in March 2016.
Fourth Quarter 2016 Results Summary
Revenue for the fourth quarter ended December 31, 2016 was $838,000, a 172% increase from $308,000 in fourth quarter ended December 31, 2015, and a 15% increase sequentially from the third quarter of 2016.
Revenues for the fourth quarter of 2016 included direct-to-consumer sales in the U.S., as well as initial direct-to-consumer and business partners sales in Australia, and product sales to distributors in the U.S., Italy, Canada, and New Zealand.
Gross loss of $647,000 was recorded in the fourth quarter of 2016, an increase of $388,000 compared to a gross loss of $259,000 in the fourth quarter of 2015.
Gross loss includes onetime items amounting to $496,000 as detailed above.
Operating loss for the fourth quarter ended December 31, 2016 increased by $2.0 million to $3.8 million, as compared to a $1.8 million operating loss in the fourth quarter ended December 31, 2015. This increase is mainly due to our additional direct sales and marketing efforts in the U.S.
Financial expenses of $1.4 million were recorded in our financial expenses in the quarter as warrant revaluation expenses as detailed above.
Net loss attributable to holders of common stock increased by $3.5 million to $5.2 million in the fourth quarter of 2016, as compared to $1.7 million in the fourth quarter of 2015.
As of December 31, 2016, cash and cash equivalents totaled $1.3 million. Subsequent to the end of the year, on January 17, 2017, the Company raised $5.1 million in a private placement offering.
DarioHealth will host a Fourth Quarter and Year End 2016 Conference Call tomorrow, March 23, 2017, at 9:00AM ET.
Conference Call Details:
Date: Thursday, March 23, 2017
Time: 9:00AM ET
Dial-in Number: (866) 682-6100
International Dial-in Number: (862) 255-5401
Webcast: http://www.investorcalendar.com/IC/CEPage.asp?ID=175764
About DarioHealth Corp.
DarioHealth Corp. is a leading global digital health company serving tens of thousands of users with dynamic mobile health solutions. We believe people deserve the best tools to manage their treatment, and harnessing big data, we have developed a unique way for our users to analyze and personalize their diabetes management. With our smart diabetes solution, users have direct access to track and monitor all facets of diabetes, without having the disease slow them down. The acclaimed Dario Blood Glucose Monitoring System all-in-one blood glucose meter and native smartphone app gives users an unrivaled method for self-diabetes management. DarioHealth is headquartered in Caesarea, Israel with a regional office in Burlington, Massachusetts. For more information, visit http://mydario.investorroom.com/.
Cautionary Note Regarding Forward-Looking Statements
This news release and the statements of representatives and partners of DarioHealth Corp. (the "Company") related thereto contain or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "plan," "project," "potential," "seek," "may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate," or "continue" are intended to identify forward-looking statements. For example, the Company is using forward-looking statements in this press release when the Company says that it expects similar sequential quarterly revenue growth in Q1 2017, describes its 2017 outlook, describes its growth prospects, says that it expects to be compensated for loss of inventory, and says that it expects to record financing income in the first quarter of 2017. Readers are cautioned that certain important factors may affect the Company's actual results and could cause such results to differ materially from any forward-looking statements that may be made in this news release. Factors that may affect the Company's results include, but are not limited to, regulatory approvals, product demand, market acceptance, impact of competitive products and prices, product development, commercialization or technological difficulties, the success or failure of negotiations and trade, legal, social and economic risks, and the risks associated with the adequacy of existing cash resources. Additional factors that could cause or contribute to differences between the Company's actual results and forward-looking statements include, but are not limited to, those risks discussed in the Company's filings with the U.S. Securities and Exchange Commission. Readers are cautioned that actual results (including, without limitation, the timing for and results of the Company's commercial and regulatory plans for Dario as described herein) may differ significantly from those set forth in the forward-looking statements.
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