NEW YORK and CAESAREA, Israel, Nov. 13, 2018 /PRNewswire/ -- DarioHealth Corp. DRIO, a leading global digital health company with mobile health and big data solutions, today reported financial and operational results for the third quarter ended September 30, 2018.
"We are excited to report that in the third quarter of 2018 we increased revenues by 37% compared to the third quarter of 2017, and in addition we have recorded an additional $335,000 in deferred revenues. This quarter represents a shift of our business from selling devices and disposables, into our digital health membership offering which provides higher margins. The deferred revenues are driven by our recently launched annual membership plan," stated Erez Raphael, CEO of DarioHealth.
"During the third quarter, we continued growing all key parameters of the business including total number of patients on the platform, average revenue per patient per month (ARPU), number of CDEs (certified diabetes educators) on the platform, while also launching our one-year memberships program," Mr. Raphael continued.
"We are particularly excited to report continued growth in our recurring revenues, with over 50% of our third quarter revenues in the U.S. being recurring. This increase in recurring revenues is an important part of our business model, as we expect it will improve predictability as we move forward," concluded Mr. Raphael.
Olivier Jarry, President and Chief Commercial Officer of DarioHealth stated, "During the third quarter, DarioHealth has led negotiations with major business-to-business accounts in the U.S. and Canada including retail chains, clinic networks, and distributors. These are expected to translate into signed agreements and revenues in the fourth quarter. As a result of these efforts, we signed our largest product rollout agreement through a U.S. retailer to date with Giant Eagle. Millions Giant Eagle customers, through 214 in-store pharmacy locations will be able to sign up for online education and rewards through the DarioHealth Blood Glucose Monitoring System and smartphone application."
Recent Operational Highlights
- Prominent healthcare industry leaders joined DarioHealth including Yoav Shaked as Chairman of the Board, Olivier Jarry as President and CCO, and Glen Muller as Board Member
- Entered agreement with Giant Eagle, one of America's largest supermarket chains, to offer a digital diabetes platform powered by Dario to Giant Eagle's 4.6 million customers
- Newly Released iPhone XS and XS Max Supported by Dario LC™ Blood Glucose Monitoring System
- Entered agreement with Attain Health to pilot DarioEngage for the management of cystic fibrosis related diabetes
- DarioEngage suite of products distributed through multiple channels and currently in use at more than 30 clinics and by nearly 100 certified diabetes educators
Financial Highlights
- First nine months revenues increase to $5.7 million, representing 58% growth year over year
- Revenues of $1.88 million in the third quarter of 2018 represent 37% growth over the third quarter of 2017
- Deferred revenues from services increase in the third quarter by $335,000 to $385,000 compared to the third quarter of 2017
- Gross profits increase 70% to $468,000 compared to the third quarter of 2017
- Fortified balance sheet with approximately $10 million fundraise
Third Quarter 2018 Results Summary
Revenue for the third quarter ended September 30, 2018 was $1.88 million, a 37% increase from $1.37 million in the third quarter ended September 30, 2017.
Revenue for the third 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 Canada. We recorded an additional $335,000 as deferred revenues from revenues generated from our new membership offering to our customers in the U.S.
Gross profit increased by $192,000, a 70% increase, to a gross profit of $468,000 in the third quarter of 2018, as compared to a gross profit of $276,000 in the third quarter of 2017.
Operating loss for the third quarter ended September 30, 2018 increased by $952,000 to $3.93 million, as compared to a $2.98 million operating loss in the third quarter ended September 30, 2017. This increase was mainly due to an increase in our sales and marketing expenses.
Net loss attributable to holders of common stock increased by $1.1 million to $4.06 million in the third quarter of 2018, as compared to $2.97 million in the third quarter of 2017.
As of September 30, 2018, cash and cash equivalents totaled $11.4 million.
Financial Results for the Nine Months Ended September 30, 2018:
Revenue for the nine months ended September 30, 2018 was $5.7 million, a 58% increase from $3.6 million for the nine months ended September 30, 2017. We recorded an additional $385,000 as deferred revenues from revenues generated from our new membership offering to our customers in the U.S.
Gross profit of $1.54 million was recorded for the nine months ended September 30, 2018, an increase of 108%, or $800,000, compared to a gross profit of $742,000 for the nine months ended September 30, 2017.
Operating loss for the nine months ended September 30, 2018 increased by $1.2 million to $12.5 million, compared to a $11.3 million operating loss for the nine months ended September 30, 2017.
Net loss was $12.8 million for the nine months ended September 30, 2018 compared to a net loss of $12.5 million for the nine months ended September 30, 2017. The increase in net loss for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 was mainly due to the increase in our operating expenses partially offset by the increase in our gross profit, and the reduction in our financing expenses related to revaluation of warrants.
Conference Call Details:
Date: Tuesday, November 13, 2018
Time: 9:00am ET
Dial-in Number: 1-877-407-8035
International Dial-in Number: 1-201-689-8035
Webcast: http://www.investorcalendar.com/event/40657
About DarioHealth Corp.
DarioHealth Corp. 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 describes expected improvements in recurring revenues, when it describes expected signed agreements and revenues in the fourth quarter of 2018, 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 | ||||||||
September 30, | December 31, | |||||||
2018 | 2017 | |||||||
Unaudited | ||||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 11,427 | $ | 3,718 | ||||
Short-term bank deposits | 184 | 258 | ||||||
Trade Receivables | 374 | 282 | ||||||
Inventories | 1,020 | 1,184 | ||||||
Other accounts receivable and prepaid expenses | 523 | 604 | ||||||
Total current assets | 13,528 | 6,046 | ||||||
LEASE DEPOSITS | 47 | 42 | ||||||
PROPERTY AND EQUIPMENT, NET | 758 | 869 | ||||||
Total assets | $ | 14,333 | $ | 6,957 | ||||
DARIOHEALTH CORP. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
U.S. dollars in thousands (except stock and stock data) | ||||||||
September 30, | December 31, | |||||||
2018 | 2017 | |||||||
Unaudited | ||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Trade payables | $ | 2,203 | $ | 1,852 | ||||
Deferred revenues | 385 | - | ||||||
Other accounts payable and accrued expenses | 1,334 | 1,163 | ||||||
Total current liabilities | 3,922 | 3,015 | ||||||
LIABILITY RELATED TO WARRANTS | - | 1 | ||||||
STOCKHOLDERS' EQUITY | ||||||||
Common Stock of $0.0001 par value - | 7 | 7 | ||||||
Preferred Stock of $0.0001 par value - | *)- | - | ||||||
Additional paid-in capital | 94,675 | 74,892 | ||||||
Accumulated deficit | (84,271) | (70,958) | ||||||
Total stockholders' equity | 10,411 | 3,941 | ||||||
Total liabilities and stockholders' equity | $ | 14,333 | $ | 6,957 | ||||
*) Represents an amount lower than $1.
DARIOHEALTH CORP. | ||||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||||||||||||||
U.S. dollars in thousands (except stock and stock data) | ||||||||||||||||
Three months ended September 30 | Nine months ended September 30 | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Unaudited | Unaudited | |||||||||||||||
Revenues | $ | 1,879 | $ | 1,375 | $ | 5,694 | $ | 3,592 | ||||||||
Cost of revenues | 1,411 | 1,099 | 4,152 | 2,850 | ||||||||||||
Gross profit | 468 | 276 | 1,542 | 742 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | $ | 997 | $ | 797 | $ | 2,749 | $ | 2,450 | ||||||||
Sales and marketing | 2,693 | 1,677 | 6,820 | 5,707 | ||||||||||||
General and administrative | 709 | 781 | 4,506 | 3,887 | ||||||||||||
Total operating expenses | 4,399 | 3,255 | 14,075 | 12,044 | ||||||||||||
Operating loss | (3,931) | (2,979) | (12,533) | (11,302) | ||||||||||||
Financial income (expenses), net: | ||||||||||||||||
Revaluation of warrants | *)- | 1 | 1 | (1,169) | ||||||||||||
Other financial (expense) income, net | (132) | 5 | (288) | (7) | ||||||||||||
Total financial income (expenses), net | (132) | 6 | (287) | (1,176) | ||||||||||||
Net loss | $ | (4,063) | $ | (2,973) | $ | (12,820) | $ | (12,478) | ||||||||
Deemed dividend related to warrant exchange agreement | $ | - | $ | - | $ | 493 | $ | - | ||||||||
Net loss attributable to holders of Common Stock | $ | (4,063) | $ | (2,973) | $ | (13,313) | $ | (12,478) | ||||||||
Net loss per share | ||||||||||||||||
Basic and diluted loss per share | $ | (0.17) | $ | (0.30) | $ | (0.67) | $ | (1.40) | ||||||||
Weighted average number of Common Stock | 23,533,328 | 9,950,443 | 19,733,291 | 8,931,460 | ||||||||||||
*) Represents an amount lower than $1.
DARIOHEALTH CORP. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
U.S. dollars in thousands | ||||||||
Nine months ended September 30, | ||||||||
2018 | 2017 | |||||||
Unaudited | ||||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (12,820) | $ | (12,478) | ||||
Adjustments required to reconcile net loss to net cash used in operating activities: | ||||||||
Stock-based compensation and Common Stock to service providers | 3,284 | 3,062 | ||||||
Depreciation | 160 | 155 | ||||||
Increase in trade receivables | (92) | (193) | ||||||
Decrease (increase) in accounts receivables and prepaid expenses | 81 | (264) | ||||||
Decrease (increase) in inventories | 164 | (36) | ||||||
Increase in trade payables | 351 | 171 | ||||||
Increase in other accounts payable and accrued expenses | 457 | 191 | ||||||
Increase in deferred revenues | 385 | - | ||||||
Change in fair value of warrants to purchase shares of Common Stock | (1) | 1,169 | ||||||
Net cash used in operating activities | (8,031) | (8,223) | ||||||
Cash flows from investing activities: | ||||||||
Maturity (investment) of (in) short-term bank deposits | 74 | (16) | ||||||
Maturity (investment) in lease deposits | (5) | 3 | ||||||
Purchase of property and equipment | (49) | (64) | ||||||
Net cash provided by (used in) investing activities | 20 | (77) | ||||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of Common Stock and warrants, net of issuance cost | 15,720 | 13,469 | ||||||
Proceeds from exercise of options and warrants | - | (*- | ||||||
Net cash provided by financing activities | 15,720 | 13,469 | ||||||
Increase in cash and cash equivalents | 7,709 | 5,169 | ||||||
Cash and cash equivalents at the beginning of the period | 3,718 | 1,093 | ||||||
Cash and cash equivalents at the end of the period | $ | 11,427 | $ | 6,262 | ||||
Non-cash investing and financing activities: | ||||||||
Reclassification of warrants from liability to equity | $ | - | $ | 8,655 | ||||
Payment for directors, employees and service providers under Stock for Cash Program | $ | 286 | $ | 183 | ||||
*) Represents an amount lower than $1.
DarioHealth Corporate Contact: Joao Mendes-Roter, VP Marketing, joao@mydario.com, 1-347-767-4220
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SOURCE DarioHealth Corp.
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