CAESAREA, Israel, May 13, 2019 /PRNewswire/ -- Global digital
therapeutics innovator DarioHealth Corp. (Nasdaq: DRIO), today
reported record financial and operational results for the first
quarter ended March 31, 2019.
CEO, Erez Raphael, stated, "Our
strong financial performance in the first quarter of 2019 was
driven by the increased contribution of our higher-margin, digital
therapy subscriptions as a percentage of revenue, as the company's
business transforms from being driven by medical devices to
software-as-a-service (SaaS).
We believe there is a growing global healthcare emphasis on
value and accountability enabled by user-centric evidence-based
solutions. DarioHealth's pioneering digital therapeutics
subscription offerings are geared towards the engaged consumer and
are driving the company's improved financial performance.
We continue to see growth acceleration across our membership in
user numbers, average revenue per user per month (ARPU), as well as
unit margin increases in the unit economics of our membership
offering.
We view these improving indicators as validation of our strategy
to accommodate increasing digital personalization of healthcare
through our shift from a med device-enabled, glucose monitoring app
model to a comprehensive, chronic condition management subscription
that helps achieve the lifestyle changes and provider access
required to meaningfully improve chronic conditions and their
costs.
One illustration of this is the value-based care payment
initiatives launched recently by the U.S. Department of Health and
Human Services (HHS) intended to transform primary care delivery
and reduce national healthcare costs, 20% of which goes to the
treatment of diabetes.
Our scalable digital therapy platform is built for integration
by large organizations such as retailers, health insurance
companies, clinics, pharmaceutical and medical device
manufacturers, and nutrition companies seeking access to health and
cost benefits for their users, enabled by healthcare digitization,
personalization and evidence-based care.
Our plan is to meet the surge of demand for data-driven
therapeutics, especially dealing with chronic conditions, and we
expect to accelerate revenue and increase revenue attributed to
monthly subscribers through the implementation of certain broad
marketing and branding initiatives in tandem with our ongoing sales
and marketing optimization efforts."
First Quarter 2019 Results Summary
Revenues for the first quarter ended March 31, 2019 were $2.24
million, representing a record amount the company has ever
achieved in a quarter, a 28% increase from $1.76 million in the first quarter ended
March 31, 2018, and a 32% increase
sequentially from the fourth quarter of 2018.
During the first quarter ended March 31,
2019, we recorded an additional $560,000 as deferred revenues from revenues
generated from our new membership offering to our customers in the
U.S., a 60% sequential increase from the fourth quarter of
2018.
Gross profit in the first quarter of 2019 increased by
$6,000, or 1%, to $558,000 compared to $552,000 in the first quarter of 2018, and a
sequential increase of 150% compared to a gross profit of
$223,000 in the fourth quarter of
2018.
Operating loss for the first quarter ended March 31, 2019 increased by $2.4 million to $5.36
million, compared to $2.9
million in the first quarter ended March 31, 2018. This increase is mainly due to
the increase in our operating expenses.
Net loss attributable to holders of common stock increased by
$2.5 million to $5.4 million in the first quarter of 2019,
compared to $2.9 million in the first
quarter of 2018.
As of March 31, 2019, cash and
cash equivalents totaled $6.96
million.
Non-GAAP billings for the three months ended March 31, 2019 were $2.8
million, a 60% increase from $1.76
million in the three months ended March 31, 2018, and a 37% sequential increase
from $2.05 million in the fourth
quarter of 2018. A reconciliation of GAAP to non-GAAP measures has
been provided in the financial statement tables included in this
press release. An explanation of these measures is also included
below under the heading "Non-GAAP Financial Measures."
A Company investor presentation is available at:
http://mydario.investorroom.com/
About DarioHealth Corp.
DarioHealth Corp. (NASDAQ: DRIO) is a leading global Digital
Therapeutics (DTx) company revolutionizing the way people manage
their health across the chronic condition spectrum. By delivering
evidence-based interventions that are driven by data, high quality
software and coaching, we developed a novel approach that empowers
individuals to adjust their lifestyle in a personalized way. Our
Cross Functional Team operates at the intersection of life
sciences, behavioral science and software technology to deliver
highly engaging therapeutic interventions. Already one of the
highest rated diabetes solutions, its user-centric approach is
loved by tens of thousands consumers around the globe. DarioHealth
is rapidly moving into new chronic conditions and geographic
markets.
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
states that its subscription offerings are driving the improved
financial performance of the company, that it views the growth in
users, ARPU and unit margin as validation of the Company's strategy
to shift to a comprehensive, chronic condition management
subscription model, its belief that its user-centric, data evidence
based solution is pioneering the space of DTx and fulfilling the
expectations of global healthcare systems for value, accountability
and strong customer empowerment and its plans to meet the surge of
demand for data-driven therapeutics, especially dealing with
chronic conditions, and its expectation for an acceleration in
revenues, and an increase in revenues attributed to monthly
subscribers, through the implementation of certain broad marketing
and branding initiatives in tandem with its ongoing sales and
marketing optimization efforts. 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 Darioâ„¢ 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.
Non-GAAP Financial Measures
We have provided in this release financial information that has
not been prepared in accordance with Generally Accepted Accounting
Principles (GAAP). These non-GAAP financial measures are not based
on any standardized methodology prescribed by GAAP and are not
necessarily comparable to similar measures presented by other
companies. We use these non-GAAP financial measures internally in
analyzing our financial results and believe they are useful to
investors, as a supplement to GAAP measures, in evaluating our
ongoing operational performance. We believe that the use of these
non-GAAP financial measures provides an additional tool for
investors to use in evaluating ongoing operating results and trends
and in comparing our financial results with peer companies, many of
which present similar non-GAAP financial measures to investors.
Non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, financial information
prepared in accordance with GAAP. Investors are encouraged to
review the reconciliation of these non-GAAP financial measures to
their most directly comparable GAAP financial measures provided in
the financial statement tables below.
Billings (non-GAAP). We define billings as revenue
recognized in accordance with GAAP plus the change in deferred
revenue from the beginning to the end of the period and adjustment
to the deferred revenue balance due to adoption of the new revenue
recognition standard less any deferred revenue balances acquired
from business combination(s) during the period. We consider
billings to be a useful metric for management and investors because
billings drive future revenue, which is an important indicator of
the health and viability of our business. There are a number of
limitations related to the use of billings instead of GAAP revenue.
First, billings include amounts that have not yet been recognized
as revenue and are impacted by the term of security and support
agreements. Second, we may calculate billings in a manner that is
different from peer companies that report similar financial
measures. Management accounts for these limitations by providing
specific information regarding GAAP revenue and evaluating billings
together with GAAP revenue.
DARIOHEALTH
CORP.
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
U.S. dollars in
thousands
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
|
December
31,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
Unaudited
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
6,958
|
|
|
$
|
10,997
|
|
Short-term restricted
bank deposits
|
|
|
185
|
|
|
|
180
|
|
Trade
Receivables
|
|
|
252
|
|
|
|
168
|
|
Inventories
|
|
|
1,924
|
|
|
|
1,377
|
|
Other accounts
receivable and prepaid expenses
|
|
|
545
|
|
|
|
591
|
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
9,864
|
|
|
|
13,313
|
|
|
|
|
|
|
|
|
|
|
LEASE
DEPOSITS
|
|
|
45
|
|
|
|
43
|
|
|
|
|
|
|
|
|
|
|
OPERATING LEASE RIGHT
OF USE ASSET
|
|
|
792
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
PROPERTY AND
EQUIPMENT, NET
|
|
|
732
|
|
|
|
733
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
11,433
|
|
|
$
|
14,089
|
|
DARIOHEALTH
CORP.
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
U.S. dollars in
thousands (except stock and stock data)
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
|
December
31,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
|
Trade
payables
|
|
$
|
2,977
|
|
|
$
|
2,574
|
|
Deferred
revenues
|
|
|
1,296
|
|
|
|
736
|
|
Operating lease
liability
|
|
|
267
|
|
|
|
-
|
|
Other accounts
payable and accrued expenses
|
|
|
2,478
|
|
|
|
1,854
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
7,018
|
|
|
|
5,164
|
|
|
|
|
|
|
|
|
|
|
OPERATING LEASE
LIABILITY
|
|
|
550
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
Common Stock of
$0.0001 par value –
Authorized: 160,000,000 shares at March 31, 2019 (unaudited) and
December
31, 2018; Issued and Outstanding: 36,821,173 and 36,607,755 shares
at March
31, 2019 (unaudited) and December 31, 2018, respectively
|
|
|
8
|
|
|
|
8
|
|
Preferred Stock of
$0.0001 par value -
Authorized: 5,000,000 shares at March 31, 2019 (unaudited) and
December 31,
2018; Issued and Outstanding: None at March 31, 2019 (unaudited)
and
December 31, 2018
|
|
|
-
|
|
|
|
-
|
|
Additional paid-in
capital
|
|
|
98,487
|
|
|
|
98,171
|
|
Accumulated
deficit
|
|
|
(94,630)
|
|
|
|
(89,254)
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
|
3,865
|
|
|
|
8,925
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders'
equity
|
|
$
|
11,433
|
|
|
$
|
14,089
|
|
DARIOHEALTH
CORP.
|
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE LOSS
|
|
U.S. dollars in
thousands (except stock and stock data)
|
|
|
|
|
|
Three months
ended
March
31
|
|
|
|
2019
|
|
|
2018
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
2,242
|
|
|
$
|
1,756
|
|
Cost of
revenues
|
|
|
1,684
|
|
|
|
1,204
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
558
|
|
|
|
552
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development
|
|
$
|
1,002
|
|
|
$
|
742
|
|
Sales and
marketing
|
|
|
3,946
|
|
|
|
1,864
|
|
General and
administrative
|
|
|
973
|
|
|
|
861
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
|
5,921
|
|
|
|
3,467
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
|
(5,363)
|
|
|
|
(2,915)
|
|
|
|
|
|
|
|
|
|
|
Financial expenses,
net:
|
|
|
|
|
|
|
|
|
Revaluation of
warrants
|
|
|
-
|
|
|
|
(1)
|
|
Other financial
expense, net
|
|
|
13
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
Total financial
expenses, net
|
|
|
13
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(5,376)
|
|
|
$
|
(2,919)
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to holders of Common Stock
|
|
$
|
(5,376)
|
|
|
$
|
(2,919)
|
|
|
|
|
|
|
|
|
|
|
Net loss per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per share
|
|
$
|
(0.15)
|
|
|
$
|
(0.20)
|
|
Weighted average
number of Common Stock used in computing basic and diluted
net loss per share
|
|
|
36,757,154
|
|
|
|
14,943,032
|
|
DARIOHEALTH
CORP.
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
U.S. dollars in
thousands
|
|
|
|
|
|
|
|
Three months
ended
March
31,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(5,376)
|
|
|
$
|
(2,919)
|
|
Adjustments required
to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Stock-based
compensation and Common Stock to service providers
|
|
|
257
|
|
|
|
230
|
|
Depreciation
|
|
|
46
|
|
|
|
53
|
|
Operating lease
exchange rate differences
|
|
|
25
|
|
|
|
-
|
|
Decrease (increase)
is trade receivables
|
|
|
(84)
|
|
|
|
82
|
|
Decrease (increase)
in accounts receivables and prepaid expenses
|
|
|
46
|
|
|
|
38
|
|
Decrease (increase)
in inventories
|
|
|
(547)
|
|
|
|
272
|
|
Increase (decrease)
in trade payables
|
|
|
403
|
|
|
|
(740)
|
|
Increase in other
accounts payable and accrued expenses
|
|
|
683
|
|
|
|
219
|
|
Deferred
revenues
|
|
|
560
|
|
|
|
-
|
|
Change in fair value
of warrants to purchase shares of Common Stock
|
|
|
-
|
|
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
operating activities
|
|
|
(3,987)
|
|
|
|
(2,766)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Maturities
(investment) of short-term restricted bank deposit
|
|
|
(5)
|
|
|
|
70
|
|
Investment in lease
deposits
|
|
|
(2)
|
|
|
|
(3)
|
|
Purchase of property
and equipment
|
|
|
(45)
|
|
|
|
(12)
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) investing activities
|
|
|
(52)
|
|
|
|
55
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from
issuance of Common Stock and warrants, net of issuance
cost
|
|
|
-
|
|
|
|
6,034
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
financing activities
|
|
|
-
|
|
|
|
6,034
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
|
|
(4,039)
|
|
|
|
3,323
|
|
Cash and cash
equivalents at the beginning of the period
|
|
|
10,997
|
|
|
|
3,718
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at the end of the period
|
|
$
|
6,958
|
|
|
$
|
7,041
|
|
|
|
|
|
|
|
|
|
|
Non-cash investing
and financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment for directors
and consultants under Shares for Salary Program
|
|
$
|
59
|
|
|
$
|
85
|
|
DARIOHEALTH
CORP.
|
|
|
Reconciliation of
Revenue to Billings (Non-GAAP)
|
|
|
U.S. dollars in
thousands
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December
31,
|
|
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
Revenue
|
|
$2,242
|
|
$1,756
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
Change in Deferred
Revenue
|
|
$560
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Billings
(Non-GAAP)
|
|
$2,802
|
|
$1,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DarioHealth Corporate Contact: Joao Mendes-Roter, VP
Marketing, joao@mydario.com, 1-347-767-4220
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SOURCE DarioHealth Corp.