CAESAREA, Israel, Nov. 14, 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-month period ended September 30, 2017.
Third Quarter Financial Highlights
- Record revenues of $1,375,000,
increased 89% compared to the third quarter of 2016
- Sequential quarterly revenue growth of 14% over the second
quarter of 2017
- 70% of quarterly revenues derived from test strips and other
consumables
- More than 10,500 Dario™ Blood Glucose Monitoring System devices
sold in the U.S. reaching cumulative sales of more than
43,500
- Consumable strips growth of 40% over second quarter of
2017
- Cash burn decreased by $347,000
or 13% compared to the second quarter of 2017
Recent Key Business Highlights
- Launched its Dario App in Google
Play, expanding its U.S. market reach
- Launched into the German market
- Gained CE Mark for iPhone 7 and iPhone 8 smart glucose
meter
- Introduction of "Dario Engage" platform; delivers to health
providers a personalized and robust solution to offer to their
diabetes population
DarioHealth ramped its business-to-consumer market penetration
and ended the third quarter of 2017 with an aggregate of 43,500
Dario Blood Glucose Monitoring System devices sold to-date. Key
performance indicators of devices sold, active users and usage of
consumable test strips all improved and continue to trend in a
positive direction.
During the third quarter of 2017, DarioHealth continued to
reduce its operating cash burn, demonstrating an improvement of
$347,000 over the second quarter of
2017. DarioHealth determines operating cash burn by reference to
net cash used in operating activities. DarioHealth also
reduced its operating loss by $1.1
million from $4.1 million to
$3.0 million. Management believes
revenue growth will accelerate and operating losses will continue
to decline as its recent initiatives in Android and a
business-to-business strategy roll-out begin to gain traction.
DarioHealth continues to evolve and position itself for the
future in digital health and personalized data management. The
Company is investing in expanding its offerings in order to create
greater long-term value.
On the business-to-business (B2B2C) side, DarioHealth is
leveraging its direct-to-consumer success, by offering
organizations an open platform that digitizes a better clinical
approach for targeted healthcare. DarioHealth has officially
launched its new corporate www.dariohealth.com website to showcase
its first-class capabilities.
The new platform, called Dario Engage, helps healthcare
providers in all aspects of user engagement, including enrollment,
coaching and ongoing communications with the end-users. With tens
of thousands of active users worldwide via its direct-to-consumer
efforts, DarioHealth has built up an impressive knowledgebase and
will use it to leverage as it expands its reach. The Company
expects to partner with additional players that will be able to
introduce the DarioHealth platform to payers and the self-insured
market in the U.S., providing their users a fully connected and
real-time solution combined with coaching services. As the market
is transforming to value-based solutions where payers are looking
to buy a fully integrated solution, DarioHealth's platform is well
positioned to address this need.
Erez Raphael, Chairman and CEO of
DarioHealth, commented, "We are pleased with the continued
sequential quarterly growth and traction we are gaining in the U.S.
It is encouraging to see our margins improve because of our growing
customer base of loyal users. With our reduction in operating cash
burn as we continue to increase our revenue over the past two
quarters, we are proving we are able to scale our business while
managing costs.
"We are excited for our near-term opportunities and longer-term
prospects as we have positioned ourselves for success with our
unique technology and direct marketing strategy. Recent business
progress of gaining Android approval, CE Mark for iPhone 7 and
iPhone 8 and the introduction of our Dario Engage
business-to-business and coaching platform are all very exciting
and expected to accelerate our growth over the next few
quarters."
Financial Results for the Three Months Ended September 30, 2017:
Revenue for the three months ended September 30, 2017 was $1,375,000, an 89% increase from $728,000 for the three months ended September 30, 2016, and a 14% increase
sequentially from the second quarter of 2017. The increase in
revenues is mainly a result of continued market penetration into
the United States.
Revenues were derived mainly from the sales of Dario™'s
components, including the Smart Meter itself, through direct sales
to consumers located mainly in the United
States and Australia,
through our on-line store and through distributors.
Gross profit of $276,000 was
recorded in the third quarter ended September 30, 2017, an increase of $200,000 compared to a gross profit of
$76,000 in the third quarter of 2016.
This represented a gross profit of 20.0% as a result of increase in
quantities sold and higher average sale prices, together with an
increase in consumable sales. During this quarter the Company
recorded a one-time write-off of old production fixtures and
related inventories amounting to $102,000 that reduced our gross profit
accordingly.
Research and development expenses increased by $138,000, or 21%, to $797,000 for the three months ended September 30, 2017, compared to $659,000 for the three months ended September 30, 2016. This increase was mainly due
to increases in salaries.
Sales and marketing expenses increased by $149,000, or 10%, to $1,682,000 for the three months ended
September 30, 2017 compared to
$1,533,000 for the three months ended
September 30, 2016. These increases
were mainly due to growth of our sales and marketing activities in
the United States and Australia, an increase in costs of online
marketing campaigns, the cost related to marketing consultants and
the costs associated with subcontractors, employee payroll and
stock based compensation.
Operating loss for the three months ended September 30, 2017 increased by $263,000 to $3.0
million, compared to a $2.7
million operating loss in the three months ended
September 30, 2016. This increase is
mainly due to the increase in our operating expenses partially
offset by the increase in the gross profit.
Net loss for the three months ended September 30, 2017 increased by $2.4 million to $3.0
million, compared to a net loss of $0.6 million for the three months ended
September 30, 2016. This increase is
mainly due to the reduction in financing income from revaluation of
warrants.
As of September 30, 2017, cash and
cash equivalents totaled $6.3
million.
Financial Results for the Nine Months Ended September 30, 2017:
Revenue for the nine months ended September 30, 2017 was $3,592,000, an 83% increase from $1,965,000 for the nine months ended September 30, 2016.
Gross profit of $742,000 was
recorded for the nine months ended September
30, 2017, an increase of $925,000 compared to a gross loss of $183,000 for the nine months ended September 30, 2016. This represented a gross
profit of 20.7% as a result of increase in quantities sold and
higher average sale prices, together with an increase in consumable
sales. During this quarter the Company recorded a one-time
write-off of old production fixtures and related inventories
amounting to $102,000 that reduced
our gross profit accordingly.
Research and development expenses increased by $0.9 million, or 55%, to $2.5 million for the nine months ended
September 30, 2017 compared to
$1.6 million for the nine months
ended September 30, 2016.
Sales and marketing expenses increased by $2.5 million, or 79%, to $5.7 million for the nine months ended
September 30, 2017 compared to
$3.2 million for the nine months
ended September 30, 2016.
Operating loss for the nine months ended September 30, 2017 increased by $4.0 million to $11.3
million, compared to a $7.3
million operating loss for the nine months ended
September 30, 2016.
Financial income of $7.5 million
was recorded in the nine months ended September 30, 2017, compared to a financial
income of $0.2 million in the nine
months ended September 30, 2016. This
change was mainly due to reversing the warrant revaluation expense
recorded in the fourth quarter of 2016, due to a price protection
feature included in warrants issued to investors in March and
August 2016. This price protection
feature expired on March 8, 2017, and
as a result we cancelled the liability related to these warrants by
recording financial income of $7.4
million.
Net loss was $3.8 million for the
nine months ended September 30, 2017
compared to a loss of $7.0 million
for the nine months ended September 30,
2016. The decrease in net loss for the nine months ended
September 30, 2017 compared to the
nine months ended September 30, 2016
was mainly due to our financial income related to revaluation of
warrants.
DarioHealth will host a third quarter 2017 conference call today
at 9:00 AM ET.
Conference Call Details:
Date: Tuesday, November 14,
2017
Time: 9:00 AM ET
Dial-in Number: (888) 567-1603
International Dial-in Number: (404) 267-0368
Webcast: http://www.investorcalendar.com/event/2249319824
Participants are recommended to dial-in approximately 10 minutes
prior to the start of the event. A replay of the call will be
available approximately two hours after completion through
February 14, 2018. To listen to the
replay, dial (877) 481-4010 (domestic) or (919) 882-2331
(international) and use replay ID 22493. The webcast replay will be
available through February 14,
2018.
About DarioHealth Corp.
DarioHealth Corp. (NASDAQ: DRIO) 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 it describes
expectations for revenue growth and decline in operating losses,
expectations for business to consumer and business to business
channels, expectations for Dario Engage, and the impact of Android
clearance. 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.
|
CONSOLIDATED
BALANCE SHEETS
|
|
U.S. dollars in
thousands
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2017
|
|
2016
|
|
|
Unaudited
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
6,262
|
|
$
1,093
|
|
Short-term bank
deposits
|
|
241
|
|
225
|
|
Trade
Receivables
|
|
419
|
|
226
|
|
Inventories
|
|
924
|
|
888
|
|
Other receivables and
prepaid expenses
|
|
768
|
|
504
|
|
|
|
|
|
|
Total current
assets
|
|
8,614
|
|
2,936
|
|
|
|
|
|
|
LEASE
DEPOSITS
|
|
32
|
|
35
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT,
NET
|
|
811
|
|
901
|
|
|
|
|
|
|
Total assets
|
|
$
9,457
|
|
$
3,872
|
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
U.S. dollars in
thousands (except stock and stock data)
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2017
|
|
2016
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIENCY)
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
Trade
payables
|
|
$
1,983
|
|
$
1,812
|
|
Other payables and
accrued expenses
|
|
1,357
|
|
1,113
|
|
|
|
|
|
|
Total current
liabilities
|
|
3,340
|
|
2,925
|
|
|
|
|
|
|
LIABILITY RELATED TO
WARRANTS
|
|
2
|
|
7,488
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
(DEFICIENCY)
|
|
|
|
|
|
Common Stock of $0.0001
par value -
Authorized:
160,000,000 shares at September 30, 2017
(unaudited) and December 31, 2016; Issued and
Outstanding: 10,238,220 and 5,713,383 shares at
September 30, 2017 (unaudited) and December 31, 2016,
respectively
|
|
6
|
|
6
|
|
Preferred Stock of
$0.0001 par value -
Authorized: 5,000,000
shares at September 30, 2017
(unaudited) and December 31, 2016; Issued and
Outstanding: 2,307,654 and None at September 30, 2017
(unaudited) and December 31, 2016, respectively
|
|
*) -
|
|
-
|
|
Additional paid-in
capital
|
|
64,892
|
|
48,413
|
|
Accumulated
deficit
|
|
(58,783)
|
|
(54,960)
|
|
|
|
|
|
|
Total stockholders'
equity (deficiency)
|
|
6,115
|
|
(6,541)
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity (deficiency)
|
|
$
9,457
|
|
$
3,872
|
|
|
*) Represents an
amount lower than $1.
|
|
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
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
Unaudited
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
1,375
|
|
$
728
|
|
$
3,592
|
|
$
1,965
|
|
Cost of
revenues
|
|
1,099
|
|
652
|
|
2,850
|
|
2,148
|
|
|
|
|
|
|
|
|
|
|
Gross profit
(loss)
|
|
276
|
|
76
|
|
742
|
|
(183)
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
797
|
|
659
|
|
2,450
|
|
1,577
|
|
Sales and
marketing
|
|
1,682
|
|
1,533
|
|
5,707
|
|
3,194
|
|
General and
administrative
|
|
781
|
|
605
|
|
3,887
|
|
2,313
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
3,260
|
|
2,797
|
|
12,044
|
|
7,084
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
(2,984)
|
|
(2,721)
|
|
(11,302)
|
|
(7,267)
|
|
|
|
|
|
|
|
|
|
|
Financial income,
net:
|
|
|
|
|
|
|
|
|
|
Revaluation of
warrants
|
|
1
|
|
2,788
|
|
7,486
|
|
938
|
|
Other financial
(expense) income, net
|
|
5
|
|
(678)
|
|
(7)
|
|
(697)
|
|
|
|
|
|
|
|
|
|
|
Total financial income,
net
|
|
6
|
|
2,110
|
|
7,479
|
|
241
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(2,978)
|
|
(611)
|
|
(3,823)
|
|
(7,026)
|
|
|
|
|
|
|
|
|
|
|
Deemed dividend related
to Series A Preferred Stock exchange agreement
|
|
-
|
|
-
|
|
-
|
|
455
|
|
Deemed dividend related
to extension of July 2015 Series A warrants in July 2016
|
|
-
|
|
265
|
|
-
|
|
265
|
|
Net loss attributable
to holders of Common Stock
|
|
(2,978)
|
|
(876)
|
|
(3,823)
|
|
(7,746)
|
|
|
|
|
|
|
|
|
|
|
Net loss per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss
per share
|
|
$
(0.30)
|
|
$
(0.15)
|
|
$
(0.43)
|
|
$
(1.54)
|
|
Weighted average number
of Common Stock used in
computing basic and diluted net loss per share
|
|
9,950,443
|
|
5,705,229
|
|
8,931,460
|
|
5,019,918
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
U.S. dollars in
thousands
|
|
|
|
Nine months
ended
September
30,
|
|
|
2017
|
|
2016
|
|
|
Unaudited
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net loss
|
|
$
(3,823)
|
|
$
(7,026)
|
|
Adjustments required
to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
Stock-based
compensation and Common Stock to service providers
|
|
3,062
|
|
914
|
|
Registration rights
waiver
|
|
-
|
|
650
|
|
Depreciation
|
|
155
|
|
273
|
|
Increase in trade
receivables
|
|
(193)
|
|
(257)
|
|
Decrease (increase) in
other receivables and prepaid expenses
|
|
(264)
|
|
80
|
|
Increase in
inventories
|
|
(36)
|
|
(517)
|
|
Increase in trade
payables
|
|
171
|
|
49
|
|
Decrease in deferred
revenues
|
|
-
|
|
(31)
|
|
Increase in other
payables and accrued expenses
|
|
191
|
|
283
|
|
Change in fair value
of warrants to purchase shares of Common Stock
|
|
(7,486)
|
|
(938)
|
|
|
|
|
|
|
Net cash used in
operating activities
|
|
(8,223)
|
|
(6,520)
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Investment in
short-term bank deposit
|
|
(16)
|
|
(155)
|
|
Maturity of lease
deposits
|
|
3
|
|
1
|
|
Purchase of property
and equipment
|
|
(64)
|
|
(406)
|
|
|
|
|
|
|
Net cash used in
investing activities
|
|
(77)
|
|
(560)
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Proceeds from
issuance of Stock and warrants, net of issuance cost
|
|
13,469
|
|
7,538
|
|
Proceeds from
exercise of options and warrants
|
|
*) -
|
|
210
|
|
|
|
|
|
|
Net cash provided by
financing activities
|
|
13,469
|
|
7,748
|
|
|
|
|
|
|
Increase in cash and
cash equivalents
|
|
5,169
|
|
668
|
|
Cash and cash
equivalents at the beginning of the period
|
|
1,093
|
|
2,671
|
|
|
|
|
|
|
Cash and cash
equivalents at the end of the period
|
|
$
6,262
|
|
$
3,339
|
|
|
|
|
|
|
Non-cash investing and
financing activities:
|
|
|
|
|
|
|
|
|
|
|
Conversion of Series A
Preferred Stock to Common Stock
|
|
$
-
|
|
$
2,277
|
|
|
|
|
|
|
Payment for directors
and employees under Stock for Cash 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: Stephen Hart, Hayden IR, DRIO@HaydenIR.com,
+1-917-658-7878
View original
content:http://www.prnewswire.com/news-releases/dariohealth-reports-third-quarter-2017-results-300555423.html
SOURCE DarioHealth Corp.