RWLK ReWalk Robotics Ltd

Highlights of the Fourth Quarter of 2023 and Early 2024

 

 

 

 

 

 

“For the formation of the new Lifeward, our organizational integration work is now completed, and we are in the ideal position to move forward to the execution of our strategy,” stated Larry Jasinski, Chief Executive Officer of Lifeward. “Our team is well prepared to support existing and new customers with our full portfolio of innovative solutions across the rehabilitation spectrum, and especially ready to maximize the opportunity created by the newly established Medicare benefit category for exoskeletons to enable broader access to ReWalk Exoskeletons for individuals with spinal cord injury.  We expect 2024 to be a year of achievement as we transition into a growth phase to capitalize on the significant commercial opportunity before us.”

 

Fourth Quarter 2023 Financial Results

 

Total revenue was $6.9 million in the fourth quarter of 2023, compared to $2.2 million during the fourth quarter of 2022, up $4.7 million, or 216%.  Revenue from the sale of products from the former ReWalk business was $2.2 million, flat with the prior year’s quarter.  This performance was driven by flat revenue from the sale of ReWalk Exoskeleton systems and a small decline in MyoCycle revenue, offset by comparatively strong sales of ReStore systems.  Revenue from the sale of products from the former AlterG business, which was acquired in August 2023, contributed $4.7 million.

 

Gross margin was 35.5% during the fourth quarter of 2023, compared to 30.9% in the fourth quarter of 2022. On a non-GAAP basis, which excludes the amortization of purchase accounting adjustments and inventory reserves listed in the attached non-GAAP reconciliation table, the adjusted gross margin was 47.0% in Q4’23, compared to 52.8% in Q4’22, a 5.8 percentage point decline. The decline in non-GAAP gross margin was primarily attributable to a more favorable mix of product sales and favorable material costs as a percentage of revenue in the prior year’s quarter.

 

Total operating expenses in the fourth quarter of 2023 were $8.6 million, compared to $5.7 million in the fourth quarter of 2022.  Of the total, AlterG contributed $3.2 million of operating expenses in the fourth quarter of 2023. Excluding the impact of AlterG, operating expenses were $5.4 million in the fourth quarter of 2023, compared to $5.7 million in the fourth quarter of 2023, down $0.3 million, or -4%.  Total operating expenses for the fourth quarter of 2023 included $1.6 million of expenses related to the acquisition of AlterG, including amortization of purchase accounting adjustments, restructuring, integration, and rebranding expenses, which are summarized in the attached non-GAAP reconciliation table.

 

Operating loss in the fourth quarter of 2023 was $6.1 million, compared to $5.0 million in the fourth quarter of 2022. On a non-GAAP basis, which excludes the items in the attached non-GAAP reconciliation table, adjusted operating loss was $3.8 million in the fourth quarter of 2023, compared to a loss of $4.0 million in the fourth quarter of 2022, an improvement of $0.2 million, or 6%.

 

Net loss was $5.6 million, or $(0.13) per share, for the fourth quarter of 2023, compared to a net loss of $5.3 million, or $(0.09) per share, in the fourth quarter of 2022. On a non-GAAP basis, which excludes the items in the attached non-GAAP reconciliation table, adjusted net loss was $3.3 million, or $(0.05) per share, in the fourth quarter of 2023, compared to $4.3 million, or $(0.07) per share, during the fourth quarter of 2022.

 

Liquidity

 

As of December 31, 2023, ReWalk had $28.1 million in unrestricted cash and cash equivalents on its balance sheet with no debt.  During the fourth quarter of 2023, cash used in operations was $4.4 million.

 

Financial Guidance

 

For the full year 2024, Lifeward expects revenue of between $28 to $32 million, non-GAAP gross margin to expand to the high 40%s, non-GAAP operating expenses to decline from the fourth quarter 2023 run rate level as a result of the integration savings, and non-GAAP operating loss to decline to the low double-digit millions.  For the first quarter, which is typically the lowest volume quarter of each year, Lifeward sees revenue of between $5.0 to $5.5 million, which the Company expects will increase in subsequent quarters consistent with historical patterns and due to the phasing in of Medicare revenue and the contribution of the AlterG new product introduction expected to start mid-year.  The expectations for the first quarter of 2024 do not include Medicare revenue.

 

 

Lifeward does not provide a GAAP reconciliation of its non-GAAP financial guidance because the Company is unable to predict with reasonable certainty and without unreasonable effort items that would be included in such a reconciliation, including, but not limited to, stock-based compensation expense, acquisition-related expense, and earnout expense. The timing and amounts of these items are uncertain and could be material to Lifeward’s results computed in accordance with GAAP.

 

Conference Call

 

ReWalk management will host its fourth quarter and full year 2023 conference call as follows:

 

About Lifeward

 

Forward-Looking Statements

 

In addition to historical information, this press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the U.S. Securities Act of 1933, and Section 21E of the U.S. Securities Exchange Act of 1934. Such forward-looking statements may include projections regarding the Company’s future performance and other statements that are not statements of historical fact and, in some cases, may be identified by words like "anticipate," "assume," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "future," "will," "should," "would," "seek" and similar terms or phrases. The forward-looking statements contained in this press release are based on management's current expectations, which are subject to uncertainty, risks and changes in circumstances that are difficult to predict and many of which are outside of the Company’s control. Important factors that could cause the Company’s actual results to differ materially from those indicated in the forward-looking statements include, among others: the Company’s ability to realize the anticipated benefits of the acquisition of AlterG, including the possibility that the expected benefits of the acquisition will not be realized within the expected time period or at all; the effect of the AlterG acquisition on the ability of the Company to retain customers and key personnel and to maintain relationships with suppliers, distributors and other key business relations; potential litigation in connection with the AlterG acquisition; uncertainties associated with future clinical trials and the clinical development process, the product development process and FDA regulatory submission review and approval process; the Company's ability to have sufficient funds to meet certain future capital requirements, which could impair the Company's efforts to develop and commercialize existing and new products; the Company's ability to regain and maintain compliance with the continued listing requirements of the Nasdaq Capital Market and the risk that its ordinary shares will be delisted if it cannot do so; the Company's ability to maintain and grow its reputation and the market acceptance of its products; the Company's ability to achieve reimbursement from third-party payors, including CMS, for its products; the Company's limited operating history and its ability to leverage its sales, marketing and training infrastructure; the Company's expectations as to its clinical research program and clinical results; the Company's expectations regarding future growth, including its ability to increase sales in its existing geographic markets and expand to new markets; the Company's ability to obtain certain components of its products from third-party suppliers and its continued access to its product manufacturers; the Company's ability to improve its products and develop new products; the Company's compliance with medical device reporting regulations to report adverse events involving the Company's products, which could result in voluntary corrective actions or enforcement actions such as mandatory recalls, and the potential impact of such adverse events on the Company's ability to market and sell its products; the Company's ability to gain and maintain regulatory approvals; the Company's ability to maintain adequate protection of its intellectual property and to avoid violation of the intellectual property rights of others; the risk of a cybersecurity attack or breach of the Company's IT systems significantly disrupting its business operations; the Company's ability to use effectively the proceeds of its offerings of securities; and other factors discussed under the heading "Risk Factors" in the Company’s annual report on Forms 10-K for the year ended December 31, 2023 filed with the SEC and other documents subsequently filed with or furnished to the SEC. Any forward-looking statement made in this press release speaks only as of the date hereof. Factors or events that could cause the Company’s actual results to differ from the statements contained herein may emerge from time to time, and it is not possible for the Company to predict all of them. Except as required by law, the Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise.

 

ReWalk Robotics Ltd. And subsidiaries

Condensed Consolidated Statements of Operations

(Audited)

(In thousands, except share and per share data)

		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
		2023				2022				2023				2022
Revenue		$	6,884			$	2,179			$	13,854			$	5,511
Cost of revenues			4,441				1,506				9,401				3,606
Gross profit			2,443				673				4,453				1,905
Operating expenses:
Research and development, net			1,318				1,103				4,148				4,031
Sales and marketing			4,846				2,723				13,922				9,842
General and administrative			2,416				1,852				9,995				7,134
Total operating expenses			8,580				5,678				28,065				21,007
Operating loss			(6,137	)			(5,005	)			(23,612	)			(19,102	)
Financial income, net			420				69				1,467				*	)
Loss before income taxes			(5,717	)			(4,936	)			(22,145	)			(19,102	)
Taxes on income expense (benefit)			(78	)			377				(12	)			467
Net loss		$	(5,639	)		$	(5,313	)		$	(22,133	)		$	(19,569	)
Basic net loss per ordinary share		$	(0.13	)		$	(0.09	)		$	(0.37	)		$	(0.31	)
Weighted average number of shares used in computing net loss per ordinary share basic and diluted			60,043,532				61,679,207				59,719,064				62,378,797

		Quarter Ended								Year Ended
		December 31,				December 31,				December 31,				December 31,
Dollars in thousands, except per share data		2023				2022				2023				2022
GAAP net loss		$	(5,639	)		$	(5,313	)		$	(22,133	)		$	(19,569	)
Adjustments:
Purchase accounting impact on inventory			-				-				607				-
Amortization of intangible assets			846				-				1,609				-
M&A transaction and integration costs			166				150				2,524				150
Rebranding			253				-				253				-
Restructuring			670				-				670				-
Earnout income			(355	)			-				(315	)			-
Inventory Write down			390				471				390				471
Stock-based compensation expense			373				347				1,328				993
Non-GAAP net loss		$	(3,296	)		$	(4,345	)		$	(15,067	)		$	(17,955	)
Shares used in net loss per share			60,043,532				61,679,207				59,719,064				62,378,797
Non-GAAP net loss per share		$	(0.05	)		$	(0.07	)		$	(0.25	)		$	(0.29	)