DarioHealth Reports Fourth Quarter and Year End 2017 Results

Published: Mar 19, 2018

CAESAREA, Israel, March 19, 2018 /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 fourth quarter and full-year periods ended on December 31, 2017.

http://mma.prnewswire.com/media/544126/DarioHealth_Logo.jpg

Fourth Quarter Highlights

  • Record revenues of $1.6 million increased 88% compared to the fourth quarter of 2016
    • Sequential quarterly revenue growth of 15% over the third quarter of 2017
    • Twelfth consecutive quarter of revenue growth
  • Gross profit of $569,000, an increase of 188% compared to the fourth quarter of 2016
  • Net loss decreased by 15% from the fourth quarter of 2016

2017 Highlights

  • Record revenues of $5.2 million increased 84% compared to the full year 2016
  • Gross profit of $1.3 million increased 258% compared to the full year 2016
  • Launched into a new market - Germany
  • Received three additional regulatory clearances: FDA for Android, CE Lightning, TGA Australia for Lightning
  • Received positive market recognition as a digital health industry leader, from both a company and product offering perspective:
    • Best "100 Global Digital Health" by The Journal of mHealth
    • Best Glucometer for Data Management by Top Ten Reviews
    • Selected by Philips' HighTechXL innovation hub
    • Recognized by CCG UK as the "First Choice" for Type 1 Diabetes

2018 Outlook

In 2018, Dario Health is confident in its ability to continue to execute on its vision and anticipates continued strong growth building on the foundation fundamentals established during 2017, including:

  • Regulatory clearances
  • Reimbursements in several territories
  • Extended offering beyond monitoring and disposables
  • Presence and operations in multiple markets
  • Expansion into multiple sales channels - including B2B and B2C

Additionally, during Q1 2018, DarioHealth raised approximately $6.6 million. The investment was led by a specialized healthcare technologies fund joined by existing major shareholders of DarioHealth, among others. The proceeds will be used to execute on the Company's growth plans.

For the first time, the Company is providing revenue guidance. The Company forecasts 2018 revenues to be between $8.3 million and $9.3 million.

Erez Raphael, Chairman and CEO of DarioHealth, commented, "Our vision and focus has enabled us to achieve real progress and numerous accomplishments during 2017 and has positioned Dario for continued growth and market penetration in 2018.

"Both the fourth quarter and full year 2017 saw record sales and we established a more predictable stream of high margin recurring subscription revenues. We are excited by the positive engagement we are achieving with our users translating into significant monthly user growth and customer lifetime value. Based on our continued momentum, we expect annual revenue growth of at least 60% in 2018.

"Today, more than ever, we have confidence that DarioHealth will transform the market from a pure monitoring solution into a full digital care solution. Dario's products combine monitoring disposables, software and service capabilities, and will result in a significantly better clinical benefit to our user."

Full Year 2017 Results Summary

For the twelve months ended December 31, 2017, revenues were $5.2 million, an 84% increase from $2.8 million for the twelve months ended December 31, 2016.

Revenues generated during the year ended December 31, 2017 were derived mainly from the sales of DarioHealth's components, including the Dario™ Blood Glucose Monitoring System itself, through direct sales to consumers located mainly in the United States, Australia and Germany, through the Company's online stores and through distributors in Canada, Italy and the United Kingdom.

Gross profit increased by $2,141,000, a 258% increase to a profit of $1,311,000 in the twelve months ended December 31, 2017, as compared to a $830,000 gross loss in the twelve months ended December 31, 2016.

Operating loss for the twelve months ended December 31, 2017 increased by $3.3 million to $14.4 million, as compared to a $11.1 million operating loss in the twelve months ended December 31, 2016.

The increase in operating loss was mainly due to the increase in operating expenses partially offset by the improvement in the gross profit compared to the twelve months ended December 31, 2016.

In the first quarter of 2017 we recorded in our financial income, warrant revaluation income of $7.4 million, as a result of reclassifying warrants issued to investors in March and August of 2016 as a "Liability related to Warrants," in 2016, 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 was reclassified back to shareholders' equity in the first quarter of 2017, while recording related financing income of $7.4 million in the first quarter of 2017.

During the year end preparation of our financial statements we determined with our auditors to revise the accounting approach to this revaluation of warrants and as a result we have revised our first quarter financing income to a financing expense of $1.2 million. As a result of this change we have resubmitted our quarterly reports. This change has no effect on the shareholders' equity nor has it any effect on the Company's cash position.

Net loss attributable to holders of common stock increased by $4.8 million, a 45% increase to $15.7 million in the twelve months ended December 31, 2017, as compared to $10.9 million in the twelve months ended December 31, 2016.

Fourth Quarter 2017 Results Summary

Revenue for the fourth quarter ended December 31, 2017 was $1,578,000, an 88% increase from $838,000 in fourth quarter ended December 31, 2016, and a 15% increase sequentially from the third quarter of 2017.

Revenues for the fourth quarter of 2017 included direct-to-consumer sales in the United States, as well as Australia and initial sales in Germany, and product sales to distributors in the United Kingdom and Canada.

Gross profit increased by $1,216,000, a 188% increase to a profit of $569,000 in the fourth quarter of 2017, as compared to a gross loss of $647,000 in the fourth quarter of 2016.

Operating loss for the fourth quarter ended December 31, 2017 decreased by $0.7 million to $3.1 million, as compared to a $3.8 million operating loss in the fourth quarter ended December 31, 2016. This decrease is mainly due to the improvement in our gross profit partially offset by the increase in our operating expenses.

Net loss attributable to holders of common stock decreased by $0.6 million to $3.26 million in the fourth quarter of 2016, as compared to $3.86 million in the fourth quarter of 2016.

As of December 31, 2017, cash and cash equivalents totaled $3.7 million. During the first quarter, of 2018, the Company raised $6.6 million in a private placement.

Conference Call Details:

Date: Monday, March 19, 2018
Time: 9:00 AM ET
Dial-in Number: 877-407-8035
International Dial-in Number: 201-689-8035
Webcast: http://www.investorcalendar.com/event/26834

About DarioHealth Corp.

DarioHealth Corp. (NASDAQ: DRIO) is a leading global digital health company serving its users with dynamic mobile health solutions. In today's day and age, knowledge of health and treatment is being democratized, and we believe people deserve to know everything about their own health and have the best tools to manage their condition. DarioHealth employs a revolutionary approach whereby harnessing big data, we have developed a novel method for chronic disease data management, empowering people to analyze and personalize self-diabetes management in a totally new way without having the disease slow them down. DarioHealth has a commercial office in New York with an R&D center in Caesarea, Israel. 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 provides revenue forecasts and describes growth potential for 2018. 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. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

 

 

    DARIOHEALTH CORP.
    -----------------

    CONSOLIDATED BALANCE SHEETS
    ---------------------------

    U.S. dollars in thousands


                                            December 31,
                                          ------------

                                            2017           2016
                                            ----           ----

    ASSETS


    CURRENT ASSETS:

    Cash and cash equivalents             $3,718         $1,093

    Short-term bank deposits                 258            225

    Trade receivables                        282            226

    Inventories                            1,184            888

    Other accounts receivable and prepaid
     expenses                                604            504


    Total current assets                   6,046          2,936
    --------------------                   -----          -----


    LEASE DEPOSITS                            42             35
                                             ---            ---


    PROPERTY AND EQUIPMENT, NET              869            901
                                             ---            ---


    Total assets                          $6,957         $3,872
    ------------                          ======         ======

 

 

    DARIOHEALTH CORP.
    -----------------

    CONSOLIDATED BALANCE SHEETS
    ---------------------------

    U.S. dollars in thousands (except stock and stock data)



                                                            December 31,
                                                            ------------

                                                                2017          2016
                                                                ----          ----

    LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)


    CURRENT LIABILITIES:

    Trade payables                                            $1,852        $1,812

    Other accounts payable and accrued expenses                1,163         1,113


    Total current liabilities                                  3,015         2,925
    -------------------------                                  -----         -----


    LIABILITY RELATED TO WARRANTS                                  1         7,488
                                                                 ---         -----



    STOCKHOLDERS' EQUITY (DEFICIENCY)

    Common Stock of $0.0001 par value -                            7             6

    Authorized: 160,000,000 shares at December 31, 2017
      and 2016; Issued and Outstanding: 14,074,238 and
      5,713,383 shares at December 31, 2017 and 2016,
      respectively

    Preferred Stock of $0.0001 par value -                         -            -

    Authorized: 5,000,000 shares at December 31, 2017
      and 2016; Issued and Outstanding: None at
      December 31, 2017 and December 31, 2016

    Additional paid-in capital                                74,892        48,413

    Accumulated deficit                                     (70,958)     (54,960)
                                                             -------       -------


    Total stockholders' equity (deficiency)                    3,941       (6,541)
    --------------------------------------                     -----        ------


    Total liabilities and stockholders' equity (deficiency)   $6,957        $3,872
    ------------------------------------------------------    ======        ======

 

 

    DARIOHEALTH CORP.
    -----------------

    CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
    ---------------------------------------------

    U.S. dollars in thousands (except stock and stock data)


                                                                Year ended

                                                             December 31,
                                                             ------------

                                                                 2017           2016
                                                                 ----           ----


    Revenues                                                   $5,170         $2,803

    Cost of revenues                                            3,859          3,364

    Impairment of production line                                   -           269
                                                                  ---           ---


    Gross profit (loss)                                         1,311          (830)
                                                                -----           ----


    Operating expenses:

    Research and development                                   $3,297         $2,154

    Sales and marketing                                         7,707          4,739

    General and administrative                                  4,726          3,378
                                                                -----          -----


    Total operating expenses                                   15,730         10,271
                                                               ------         ------


    Operating loss                                             14,419         11,101


    Financial expenses (income), net:

    Revaluation of warrants                                     1,168          (260)

    Other financial expense, net                                  156             46
                                                                  ---            ---


     Total financial income, net                                1,324          (214)
                                                                -----           ----


    Net loss                                                  $15,743        $10,887
                                                              =======        =======


    Deemed dividend                                               255            710
                                                                  ---            ---


    Net loss attributable to holders of Common Stock          $15,998        $11,607
                                                              =======        =======


    Net loss per share:


    Basic and diluted loss per share                            $1.64          $2.09
                                                                =====          =====

    Weighted average number of Common Stock                 9,628,256      5,202,974
    used in computing basic and diluted net loss
    per share


 

 

    DARIOHEALTH CORP.
    -----------------

    CONSOLIDATED STATEMENTS OF CASH FLOWS
    -------------------------------------

    U.S. dollars in thousands


                                                    Year ended

                                                 December 31,
                                                 ------------

                                                      2017           2016
                                                      ----           ----

    Cash flows from operating activities:
    -------------------------------------

    Net loss                                     $(15,743)     $(10,887)

    Adjustments required to reconcile net loss
     to net cash used in operating activities:

    Stock-based compensation and Common Stock
     to service providers                            3,824          1,038

    Depreciation                                       195            387

    Write-off of a production line                       -           269

    Increase (decrease) in trade receivables          (56)         (226)

    Increase (decrease) in deferred revenues             -          (31)

    Decrease (increase) in other accounts
     receivable and prepaid expenses                  (99)           406

    Increase in inventories                          (295)         (287)

    Increase (decrease) in trade payables               39            834

    Increase in other accounts payable and
     accrued expenses                                  334            378

    Change in the fair value of warrants to
     purchase shares of Common Stock                 1,168          (260)

    Revaluation of short-term bank deposits           (17)

    Loss from disposal of fixed assets                  31              -


    Net cash used in operating activities         (10,619)       (8,379)
                                                   -------         ------


    Cash flows from investing activities:
    -------------------------------------

    Investment in short-term bank deposits            (17)         (145)

    Investment in lease deposit, net                   (7)             6

    Purchase of property and equipment               (195)         (808)


    Net cash used in investing activities            (219)         (947)
                                                      ----           ----


    Cash flows from financing activities:
    -------------------------------------

    Proceeds from issuance of shares and
     warrants, net of issuance cost                 13,463          7,538

    Proceeds from exercise of warrants                *) -           210
                                                      ----           ---


    Net cash provided by financing activities       13,463          7,748
                                                    ------          -----


    Increase (decrease) in cash and cash
     equivalents                                     2,625        (1,578)

    Cash and cash equivalents at beginning of
     year                                            1,093          2,671
                                                     -----          -----


    Cash and cash equivalents at end of year        $3,718         $1,093
                                                    ======         ======


    Non-cash investing and financing activities:
    --------------------------------------------

    Conversion of Series A Preferred Stock to
     Common stock                                        -         2,277
                                                       ===         =====


    Reclassification of warrants from liability
     to equity                                       8,655              -
                                                     =====            ===


    Payment for executives and directors under
     Salary Program                                    183            154
                                                       ===            ===


    *) Represents an amount lower than $1.

 

DarioHealth Corporate Contact: Shmuel Herschberg, Marketing Director, shmuel@mydario.com, 1-914-775-5548

DarioHealth Public Relations Contact: Terese Kelly, Rosica PR, terese@rosica.com, 1-201-843-5600

DarioHealth Investor Relations Contact: Westwicke Partners, Dario@Westwicke.com, 1-443-213-0500

 

 

 

 

View original content: http://www.prnewswire.com/news-releases/dariohealth-reports-fourth-quarter-and-year-end-2017-results-300615810.html

SOURCE DarioHealth Corp.

 

Back to news