DarioHealth Reports Second Quarter 2018 Results

Published: Aug 09, 2018

 

- Record Q2 2018 revenue of $2.06 million marks 70% growth year over year
- Sequential quarterly growth of 17%
- Cash burn reduced by 27% from previous quarter

NEW YORK and CAESAREA, Israel, Aug. 9, 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 second quarter ended June 30, 2018.

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Second Quarter Highlights

  • Record revenue of $2.06 million, an increase of 70% compared to the second quarter of 2017
    • Sequential quarterly revenue growth of 17% over the first quarter of 2018
    • Fourteenth consecutive quarter of revenue growth
    • Deferred revenues from services of $50,000
  • Gross profit of $522,000, an increase of 45% compared to the second quarter of 2017.
  • Cash burn during the second quarter of 2018 of $2 million, down 27% from $2.77 million in the first quarter of 2018.
  • Reported data on over 17,000 users of DarioHealth's Digital Diabetes Management System at the American Diabetes Association's (ADA) 78th Scientific Sessions. Data showed reductions in the ratio of high glucose events, increase in the ratio of normal readings, with improvements increasing with longevity of use. Data was collected long-term users of DarioHealth's technology in their daily lives. These results are real-world evidence that we believe is significantly different from, and more robust than, data that comes from a theoretical controlled clinical trial.
  • Launched version 4.0 of our award-winning Dario™ app.
  • Established a strong team in the U.S. that is executing on both the business-to-business and business-to-consumer fronts.
  • Implemented the Dario Engage integrated solution in accounts in the U.S. and around the world.
  • Successfully launched the Lightning®-enabled version of the Dario™ Blood Glucose Monitoring System which enables the use of the Dario™ app on iPhone 7, 8 and X following the U.S. Food and Drug Administration's (FDA) 510(k) marketing clearance in the first quarter. We believe that the Lightning®-enabled version is being very well received in a market addressing an estimated 44% of the 141 million iPhones in the U.S. today.

Erez Raphael, CEO of DarioHealth, commented, "We are very pleased to report record quarterly revenue of $2.06 million and our 14th consecutive quarter of revenue growth. While revenues continue to increase, our cash burn is narrowing. We believe that DarioHealth has proven that digital health technologies offer a new paradigm in healthcare that creates better patient outcomes and successful businesses. With our global infrastructure, approvals in seven countries with a collective population of over 48 million people with diabetes, a robust U.S. sales team, and wide market reach, we are scaling up to serve more people who are living with chronic disease. We anticipate continued quarterly revenue growth at a pace of 60% to 80% year over year. We believe our effective business execution in the disruptive digital health space was a factor in our common stock being added to the Russell Microcap® Index during the second quarter of 2018."

"The digital health industry continues to create traction in its ability to change healthcare. According to Digital Health Network publication, $16 billion was invested into the digital health industry in the past year, and introduced to the market an increasing number of solutions that are more digital and more user centric. As the number of personalized and patient-centric solutions increases, and the payer community actively rewards healthier, cost saving behavior, I believe this will increase market penetration of digital health solutions upwards of 10% for diabetes and other chronic conditions. We are very proud that DarioHealth is creating an impact in this industry through our market leadership, proving that consumers are looking for user centric digital solutions and that these solutions are changing their lives for the better," Mr. Raphael concluded.

Second Quarter 2018 Results Summary

Revenue for the second quarter ended June 30, 2018 was $2.06 million, a 70% increase from $1.2 million in the second quarter ended June 30, 2017, and a 17% increase sequentially from the first quarter of 2018.

Revenue for the second quarter of 2018 included direct-to-consumer sales in the United States and Australia, as well as sales in Germany, and product sales to distributors in the United Kingdom and Italy. We recorded an additional $50,000 as deferred revenues from revenues generated from our new membership offering to our customers in the U.S.

Gross profit increased by $162,000, a 45% increase, to a gross profit of $522,000 in the second quarter of 2018, as compared to a gross profit of $360,000 in the second quarter of 2017. During the second quarter of 2018, we recorded in our cost of goods sold a provision of $128,000 as a write-off of our old cartridge production mold, and $31,000 attributable to a new manufacturing mold.

Operating loss for the second quarter ended June 30, 2018 increased by $1.6 million to $5.7 million, as compared to a $4.1 million operating loss in the second quarter ended June 30, 2017, and a 99% increase sequentially from the first quarter of 2018. This increase is mainly due to an expense of $1.78 million recorded in the second quarter of 2018 following the grant of shares to employees and board members.

Net loss increased by $1.7 million to $5.8 million in the second quarter of 2018, as compared to $4.1 million in the second quarter of 2017.

As of June 30, 2018, cash and cash equivalents totaled $5 million.

Financial Results for the Six Months Ended June 30, 2018:

Revenue for the six months ended June 30, 2018 was $3.8 million, a 72% increase from $2.2 million for the six months ended June 30, 2017. We recorded an additional $50,000 as deferred revenues from revenues generated from our new membership offering to our customers in the U.S.

Gross profit of $1.1 million was recorded for the six months ended June 30, 2018, an increase of 130% or $608,000 compared to a gross profit of $466,000 for the six months ended June 30, 2017.

Operating loss for the six months ended June 30, 2018 increased by $279,000 to $8.6 million, compared to a $8.3 million operating loss for the six months ended June 30, 2017.

Net loss was $8.76 million for the six months ended June 30, 2018 compared to a net loss of $9.5 million for the six months ended June 30, 2017. The decrease in net loss for the six months ended June 30, 2018 compared to the six months ended June 30, 2017 was mainly due to the increase in our gross profit and the reduction in our financing expenses related to revaluation of warrants.

Conference Call Details:

Date: Thursday, August 9, 2018
Time: 9:00am EDT
Dial-in Number: 1-877-407-8035
International Dial-in Number: 1-201-689-8035
Webcast: http://www.investorcalendar.com/event/34198

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, describes growth potential for 2018, the Company's belief that as the number of personalized and patient-centric solutions increases, and the payer community actively rewards healthier, cost saving behavior will increase market penetration of digital health solutions upwards and when it describes potential market opportunities. 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


                                          June 30,  December 31,
                                          --------  ------------

                                               2018          2017
                                               ----          ----

                                          Unaudited

    ASSETS


    CURRENT ASSETS:

    Cash and cash equivalents                $5,011        $3,718

    Short-term bank deposits                    182           258

    Trade Receivables                           348           282

    Inventories                               1,168         1,184

    Other accounts receivable and prepaid
     expenses                                   557           604


    Total current assets                      7,266         6,046
    --------------------                      -----         -----


    LEASE DEPOSITS                               42            42
                                                ---           ---


    PROPERTY AND EQUIPMENT, NET                 791           869
                                                ---           ---


    Total assets                             $8,099        $6,957
    ------------                             ======        ======

 

 

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

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

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


                                                                    June 30,           December 31,

                                                                                  2018                   2017
                                                                                  ----                   ----

                                                                    Unaudited


    LIABILITIES AND STOCKHOLDERS' EQUITY
    (DEFICIENCY)


    CURRENT LIABILITIES:

    Trade payables                                                              $2,078                 $1,852

    Deferred revenues                                                               50

    Other accounts payable and accrued expenses                                  1,816                  1,163
                                                                                 -----                  -----


    Total current liabilities                                                    3,944                  3,015
    -------------------------                                                    -----                  -----


    LIABILITY RELATED TO WARRANTS                                                    -                     1
                                                                                   ---                   ---


    STOCKHOLDERS' EQUITY (DEFICIENCY)

    Common Stock of $0.0001 par value -                                              7                      7
        Authorized: 160,000,000 shares at June 30, 2018 (unaudited)
        and December 31, 2017; Issued and Outstanding: 21,081,393
        and 14,074,238 shares at June 30, 2018 (unaudited) and
        December 31, 2017, respectively

    Preferred Stock of $0.0001 par value -                                           -                     -
        Authorized: 5,000,000 shares at June 30, 2018 (unaudited)
        and December 31, 2017; Issued and Outstanding: None at
        June 30, 2018 (unaudited) and December 31, 2017

    Additional paid-in capital                                                  84,356                 74,892

    Accumulated deficit                                                       (80,208)              (70,958)
                                                                               -------                -------


    Total stockholders' equity (deficiency)                                      4,155                  3,941
    --------------------------------------                                       -----                  -----


    Total liabilities and stockholders' equity (deficiency)                     $8,099                 $6,957
    ------------------------------------------------------                      ======                 ======

 

 

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

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

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


                                                                                                   Three months ended               Six months ended
                                                                                                   ------------------             ----------------

                                                                                                         June 30                      June 30
                                                                                                         -------                      -------

                                                                                                            2018             2017                       2018          2017
                                                                                                            ----             ----                       ----          ----

                                                                                                        Unaudited                    Unaudited
                                                                                                                                     ---------


    Revenues                                                                                              $2,059           $1,210                     $3,815        $2,217

    Cost of revenues                                                                                       1,537              850                      2,741         1,751
                                                                                                           -----              ---                      -----         -----


    Gross profit                                                                                             522              360                      1,074           466
                                                                                                             ---              ---                      -----           ---


    Operating expenses:

    Research and development                                                                              $1,010           $1,184                     $1,752        $1,653

    Sales and marketing                                                                                    2,303            2,205                      4,127         4,030

    General and administrative                                                                             2,936            1,089                      3,797         3,106
                                                                                                           -----            -----                      -----         -----


    Total operating expenses                                                                               6,249            4,478                      9,676         8,789
                                                                                                           -----            -----                      -----         -----


    Operating loss                                                                                       (5,727)         (4,118)                   (8,602)      (8,323)


    Financial income (expenses), net:

    Revaluation of warrants                                                                                  *)-              25                          1       (1,170)

    Other financial (expense) income, net                                                                  (111)               1                      (156)         (12)
                                                                                                            ----              ---                       ----           ---


    Total financial income (expenses), net                                                                 (111)              26                      (155)      (1,182)


    Net loss                                                                                            $(5,838)        $(4,092)                  $(8,757)     $(9,505)
                                                                                                         -------          -------                    -------       -------


    Deemed dividend related to warrant                                                                      $493      $         -                      $493  $          -
        exchange agreement


    Net loss attributable to holders of                                                                 $(6,331)        $(4,092)                  $(9,250)     $(9,505)
        Common Stock



    Net loss per share


    Basic and diluted loss per share                                                                     $(0.32)         $(0.43)                   $(0.52)      $(1.13)
                                                                                                          ------           ------                     ------        ------

    Weighted average number of Common                                                                 19,801,891        9,521,730                 17,758,064     8,377,667
        Stock used in computing basic and
        diluted net loss per share



                                                            *) Represents an amount lower than $1.

 

 

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

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

    U.S. dollars in thousands


                                                                                           Six months ended
                                                                                         ----------------

                                                                                             June 30,
                                                                                             --------

                                                                                                2018             2017
                                                                                                ----             ----

                                                                                            Unaudited
                                                                                            ---------


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

    Net loss                                                                                $(8,757)        $(9,505)

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

    Stock-based compensation and Common Stock to service providers                             2,651            2,441


    Depreciation                                                                                 101              101

    Increase in trade receivables                                                               (66)           (146)

    Decrease (increase) in accounts receivables and prepaid expenses                              47            (146)

    Decrease in inventories                                                                       16              171

    Decrease (increase) in trade payables                                                        226            (827)

    Increase in other accounts payable and accrued expenses                                      939              915

    Increase in deferred revenues                                                                 50                -

    Change in fair value of warrants to purchase shares of Common Stock                          (1)           1,170


    Net cash used in operating activities                                                    (4,794)         (5,826)
                                                                                              ------           ------


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

    Maturity of short-term bank deposits                                                          76                -

    Investment in lease deposits                                                                   -             (7)

    Purchase of property and equipment                                                          (23)            (31)
                                                                                                 ---              ---


    Net cash derived from (used in) investing activities                                          53             (38)
                                                                                                 ---              ---


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

    Proceeds from issuance of Common Stock and warrants, net of issuance cost                  6,034            8,669


    Net cash provided by financing activities                                                  6,034            8,669
                                                                                               -----            -----


    Increase in cash and cash equivalents                                                      1,293            2,805

    Cash and cash equivalents at the beginning of the period                                   3,718            1,093
                                                                                               -----            -----


    Cash and cash equivalents at the end of the period                                        $5,011           $3,898
                                                                                              ======           ======


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


    Payment for directors, employees and service providers under Stock for Cash                 $201             $183
    Program

 

DarioHealth Corporate Contact: Joao Mendes-Roter, VP Marketing, joao@mydario.com, 1-914-775-5548

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

 

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SOURCE DarioHealth Corp.

Company Codes: NASDAQ-SMALL:DRIO

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