Owlet, Inc. ("Owlet" or the "Company") (NYSE: OWLT) today
reported preliminary, unaudited financial results for the fourth
quarter and fiscal year ended December 31, 2021. Owlet’s Chief
Executive Officer, Kurt Workman, and Chief Financial Officer, Kate
Scolnick, will host a conference call to review the Company’s
results today at 5 p.m. ET.
Recent Highlights
- Generated revenues of $75.8 million and gross profit of $35.1
million in fiscal year 2021, exceeding fiscal year 2020
- Expanded product availability across Europe, with over 100%
growth in international revenue from 2020 to 2021
- Launched the new Dream product line domestically in January
2022, including Dream Sock and Dream Duo, which were named “The
Best New Tech for Families” by PARENTS magazine
- Recorded highest-ever non-promotional sales days on
owletcare.com in the first two days of the Dream launch
- Launched new sleepwear line with the Owlet Sleeper
- Received ISO 13485 and MDSAP certifications, as the Company
works toward the necessary requirements for medical device
manufacturer quality systems
“Our team has done a phenomenal job bringing the new Dream Sock
and Dream Duo products to market in the U.S., and I’m encouraged by
the enthusiasm and feedback thus far from parents,” said Kurt
Workman, Owlet Co-Founder and Chief Executive Officer. “Outside of
the U.S., we’ve made great strides in our international expansion
efforts in Europe in 2021, and in 2022 we plan to grow in Latin
America and Asia. We have an exciting product roadmap, and we
continue forward in our efforts toward medical device submission.
We remain anchored to our mission and the huge opportunity to help
expand care at home and truly empower parents.”
Financial Results for the Fourth Quarter and Fiscal Year
Ended December 31, 2021
Through the first three quarters of 2021, Owlet’s revenues were
$78.4 million, up 44% for the first three quarters of the year
compared to the same period in 2020. Early in the fourth quarter,
Owlet received a Warning Letter from FDA that resulted in the
Company’s decision to halt sales of all Smart Sock products in the
U.S. while it works to obtain FDA pre-market authorization.
In partnership with U.S. retailers and to support strong
retailer relationships, the Company accepted returns for Smart Sock
and Owlet Monitor Duo products. As a result of the accepted and
anticipated product returns from U.S. retailers, the Company
recorded a contra-revenue adjustment of $23.2 million, resulting in
total net negative revenues of $2.5 million for the fourth quarter
of 2021. Owlet does not anticipate additional material return
adjustments for Smart Sock in the U.S. in future periods.
Cost of revenues for the quarter ended December 31, 2021 was
$3.5 million, including a benefit of $8.2 million related to
product returns, and gross profit was negative $6.0 million.
Operating expenses for the fourth quarter were $27.3 million
compared to $13.5 million for the same period in 2020. The increase
in operating expenses for the fourth quarter of 2021 was primarily
for planned increases in spending associated with the scaling of
the business including expanded headcount and higher marketing
spend.
Operating loss and net loss for the quarter ended December 31,
2021 were $33.3 million and $24.1 million, respectively, as
compared with $3.4 million operating loss and $5.8 million net loss
for the same period in 2020.
EBITDA loss for the fourth quarter of 2021 was $23.3 million,
compared to EBITDA loss of $5.2 million for the same period in
2020.
Adjusted EBITDA loss for the fourth quarter of 2021 was $31.3
million compared to Adjusted EBITDA loss of $2.4 million for the
same period in 2020.
Net loss per share for the quarter ended December 31, 2021 was
$0.22, compared to net loss per share of $0.26 for the same period
in 2020. Adjusted net loss per share was $0.29 for the quarter
ended December 31, 2021, compared to adjusted net loss per share of
$0.14 for the same period in 2020.
For the year ended December 31, 2021, revenues were $75.8
million, an increase of $0.4 million, or 0.6%, from $75.4 million
for the year ended December 31, 2020. The $23.9 million
year-over-year increase during the first nine months of 2021 was
substantially offset by contra-revenue in the fourth quarter of
2021 due to the impact of the FDA Warning Letter. The Company has
accrued returns of $20.1 million related to the anticipated and
accepted product returns, as of December 31, 2021. Return estimates
were developed in partnership with retailers, and the Company does
not anticipate material return adjustments for Smart Sock in the
U.S. in future periods.
Cost of revenues for the year ended December 31, 2021 was $40.8
million, including a benefit of $8.2 million related to product
returns in the fourth quarter, and gross profit was $35.1 million.
Related to the anticipated and accepted product returns, as of
December 31, 2021, the Company has recorded a $6.7 million asset
within prepaid expenses and other current assets for inventory
expected to be received but not yet returned, and $1.4 million
within inventory for returned inventory received as of December 31,
2021.
For the year ended December 31, 2021, gross margin was 46.2%
compared to 47.6% for the same period in 2020. Year-over-year gross
margin was negatively impacted by product returns in the fourth
quarter of 2021 and increased transportation and materials costs
over 2020, partially offset by lower warranty expense.
Operating expenses for the year ended December 31, 2021 were
$90.9 million compared to $42.9 million for the same period in
2020. The increase in year-over-year operating expenses was for
planned increases in spending associated with the scaling of the
business, increased marketing spend, and expenses related to
Owlet’s merger transaction with Sandbridge Acquisition Corp.
Operating loss and net loss for the year ended December 31, 2021
were $55.8 million and $71.7. million, respectively, as compared
with $7.0 million operating loss and $10.5 million net loss for the
same period in 2020.
EBITDA loss for the year ended December 31, 2021 was $42.7
million, compared to EBITDA loss of $8.2 million for the same
period in 2020.
Adjusted EBITDA loss for the year ended December 31, 2021 was
$45.2 million compared to Adjusted EBITDA loss of $4.6 million for
the same period in 2020.
Net loss per share for the year ended December 31, 2021 was
$1.13, compared to net loss per share of $0.48 for the same period
in 2020. Adjusted net loss per share was $0.76 for the year ended
December 31, 2021, compared to adjusted net loss per share of $0.31
for the same period in 2020.
Financial Outlook
Gross billings for January and February 2022 were slightly
higher than the same time period in 2021. Gross billings is defined
as amounts invoiced to customers prior to the impact of
adjustments, such as promotions, discounts and other allowances.
Additionally, all of the Company’s major U.S. retailers have the
Dream product line available online and many have the Dream product
line in their stores. The Company anticipates all of its major U.S.
retailers will have the Dream product line fully available online
and in stores by the end of the first quarter of 2022.
Because the Dream product line is new and rapidly ramping across
the Company’s go-to-market channels online and in stores over the
course of the first quarter and the Company is actively in the
process of receiving and reworking product inventory, Owlet is not
providing guidance for 2022 financial expectations at this time.
The Company anticipates providing an updated outlook when reporting
first quarter 2022 results.
Conference Call and Webcast information
Owlet will host a conference call and audio webcast today at 5
p.m. ET to discuss these results.
Domestic:
(844) 200-6205
Domestic Local:
(646) 904-5544
All Other:
(929) 526-1599
Access Code:
796365
Parties wishing to access the call via webcast should use the
link in the Investors section of the Owlet website at
investors.owletcare.com.
A replay of the webcast will be available in the Investors
section of the website approximately 30 minutes after the
conclusion of the call. Parties wishing to listen to the replay by
phone may do so by dialing (866) 813-9403 or (929) 458-6194 (U.S.),
and +44 204 525-0658 (International) and referencing access code
396273.
About Owlet, Inc.
Owlet was founded by a team of parents in 2012. Owlet’s mission
is to empower parents with the right information at the right time,
to give them more peace of mind and help them find more joy in the
journey of parenting. Owlet’s digital parenting platform aims to
give parents real-time data and insights to help parents feel more
calm and confident. Owlet believes that every parent deserves peace
of mind and the opportunity to feel their well-rested best. Owlet
also believes that every child deserves to live a long, happy, and
healthy life, and is working to develop products to help further
that belief. To learn more, visit www.owletcare.com.
Forward-Looking Statement Disclaimer
Certain statements, estimates, targets and projections in this
press release may be considered forward-looking statements.
Forward-looking statements generally relate to future events or
Owlet’s future financial or operating performance. For example,
statements relating to the regulatory status of Owlet’s products
are forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as “may”, “should”,
“expect”, “intend”, “will”, “estimate”, “anticipate”, “believe”,
“predict”, “potential” or “continue”, or the negatives of these
terms or variations of them or similar terminology. Such
forward-looking statements are subject to risks, uncertainties, and
other factors which could cause actual results to differ materially
from those expressed or implied by such forward-looking
statements.
These forward-looking statements are based upon estimates and
assumptions that, while considered reasonable by Owlet and its
management, are inherently uncertain. Factors that may cause actual
results to differ materially from current expectations include, but
are not limited to: Owlet’s competition; the regulatory pathway for
Owlet products and responses from regulators, including the U.S.
Food and Drug Administration and similar regulators outside of the
United States; the ability of Owlet to maintain relationships with
customers, manufacturers and suppliers and retain Owlet’s
management and key employees; changes in applicable laws or
regulations; the possibility that Owlet may be adversely affected
by other economic, business, regulatory and/or competitive factors;
the ability of Owlet to implement its strategic initiatives and
continue to innovate its existing products; the ability of Owlet to
defend its intellectual property and satisfy regulatory
requirements; the impact of the COVID-19 pandemic on Owlet’s
business; Owlet’s limited operating history and history of losses;
and other risks and uncertainties set forth in the section entitled
“Risk Factors” and “Cautionary Note Regarding Forward-Looking
Statements” in the Company’s Form 10-Q for the quarter ended
September 30, 2021, and in other reports the Company files with or
furnishes to the SEC. Any such forward-looking statements represent
management’s estimates and beliefs as of the date of this press
release. While Owlet may elect to update such forward-looking
statements at some point in the future, other than as required by
law, it disclaims any obligation to do so, even if subsequent
events cause its views to change.
Non-GAAP Financial Measures
This press release includes references to financial measures
that are not presented in accordance with generally accepted
accounting principles in the United States (“GAAP”), including
EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net loss
and Adjusted net loss per share. These non-GAAP financial measures
are not based on any comprehensive set of accounting rules or
principles and should not be considered a substitute for, or
superior to, financial measures calculated in accordance with GAAP,
and may be different from non-GAAP financial measures used by other
companies. In addition, these non-GAAP financial measures should be
read in conjunction with the Company’s financial statements
prepared in accordance with GAAP. The reconciliations of the
Company’s non-GAAP financial measures to the corresponding GAAP
measures should be carefully evaluated.
The Company’s non-GAAP financial measures should not be
considered as an alternative to net loss or net loss per share as a
measure of financial performance or any other performance measure
derived in accordance with GAAP, and should not be construed as an
inference that the Company’s future results will be unaffected by
unusual or non-recurring items. EBITDA is defined as net loss
adjusted for income tax provision, interest expense, interest
income, and depreciation and amortization. Adjusted EBITDA is
defined as net loss adjusted for income tax provision, interest
expense, interest income, depreciation and amortization, preferred
and common stock warrant liability adjustments, stock-based
compensation, transaction costs, loss on extinguishment of debt,
and gain on loan forgiveness. Adjusted EBITDA margin is defined as
Adjusted EBITDA divided by revenues. Adjusted net loss is defined
as net loss adjusted for interest expense from contingent
beneficial conversion feature, preferred stock and common stock
warrant liability adjustments, stock-based compensation,
transaction costs, loss on extinguishment of debt, and gain on loan
forgiveness. Adjusted loss per share is defined as Adjusted net
loss divided by weighted-average shares of common stock.
The Company presents these non-GAAP financial measures because
management believes that these measures assist investors and
analysts in comparing the Company’s operating performance across
reporting periods on a consistent basis by excluding items that
management does not believe are indicative of the Company’s ongoing
operating performance. Investors are encouraged to evaluate these
adjustments and the reasons the Company considers them appropriate
for supplemental analysis. In evaluating the Company’s non-GAAP
financial measures, investors should be aware that in the future
the Company may incur expenses that are the same as or similar to
some of the adjustments in the Company’s presentation of Company’s
non-GAAP financial measures. The Company’s presentation of
Company’s non-GAAP financial measures should not be construed as an
inference that the Company’s future results will be unaffected by
unusual or non-recurring items. There can be no assurance that the
Company will not modify the presentation of the Company’s non-GAAP
financial measures in future periods, and any such modification may
be material. In addition, the Company’s non-GAAP financial measures
may not be comparable to similarly titled measures used by other
companies in the Company’s industry or across different
industries.
Owlet, Inc.
Condensed Consolidated Balance
Sheets - Preliminary, Unaudited1
(in millions)
Assets
December 31, 2021
December 31, 2020
Current assets:
Cash and cash equivalents
$
95.1
$
17.0
Accounts receivable
10.5
10.5
Inventory
18.0
7.9
Prepaid expenses and other current
assets
12.3
2.2
Total current assets
135.8
37.6
Property and equipment, net
1.9
1.7
Intangible assets, net
1.7
0.6
Other assets
0.7
0.2
Total assets
$
140.0
$
40.1
Liabilities, Preferred Stock, and
Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable
$
27.8
$
16.4
Accrued and other expenses
31.7
10.6
Deferred revenues
1.1
1.6
Line of credit
—
9.7
Current portion of related party
convertible notes payable
—
6.9
Current portion of long-term debt
8.5
2.0
Total current liabilities
69.1
47.3
Long-term debt, net
8.0
10.2
Preferred stock warrant liability
—
3.0
Common stock warrant liability
7.1
—
Other long-term liabilities
0.7
0.5
Total liabilities
84.9
60.9
Total redeemable convertible preferred
stock
—
47.2
Total stockholders’ equity (deficit)
55.2
(68.0
)
Total liabilities, redeemable convertible
preferred stock, and stockholders’ equity (deficit)
$
140.0
$
40.1
Owlet, Inc.
Condensed Consolidated Cash
Flows - Preliminary, Unaudited1
(in millions)
For the Years Ended December
31,
2021
2020
Net cash used in operating activities
$
(40.6
)
$
(0.1
)
Net cash used in investing activities
(2.0
)
(1.1
)
Net cash provided by financing
activities
120.6
6.5
Net change in cash and cash
equivalents
$
78.0
$
5.3
Owlet, Inc.
Consolidated Statements of
Operations and Comprehensive Loss - Preliminary, Unaudited1
(in millions, except share and
per share amounts)
Three Months Ended December
31,
Year ended December
31,
2021
2020
2021
2020
Revenues
$
(2.5
)
$
21.0
$
75.8
$
75.4
Cost of revenues
3.5
10.8
40.8
39.5
Gross profit
$
(6.0
)
$
10.2
$
35.1
$
35.9
Operating expenses:
General and administrative
9.8
4.5
32.3
13.1
Sales and marketing
10.3
6.2
37.1
19.3
Research and development
7.2
2.8
21.4
10.5
Total operating expenses
$
27.3
$
13.5
$
90.9
$
42.9
Operating loss
$
(33.3
)
$
(3.4
)
$
(55.8
)
$
(7.0
)
Other income (expense):
Gain on loan forgiveness
—
—
2.1
—
Interest expense, net
(0.4
)
(0.4
)
(1.8
)
(1.4
)
Interest expense from contingent
beneficial conversion feature
—
—
(26.1
)
—
Preferred stock warrant liability
adjustment
—
(2.0
)
(5.6
)
(2.0
)
Common stock warrant liability
adjustment
10.0
—
15.7
—
Other income (expense), net
(0.3
)
(0.1
)
(0.3
)
(0.2
)
Total other income (expense), net
$
9.3
$
(2.4
)
(15.9
)
(3.5
)
Loss before income tax provision
(24.0
)
(5.8
)
(71.7
)
(10.5
)
Income tax provision
—
—
—
—
Net loss and comprehensive loss
$
(24.1
)
$
(5.8
)
$
(71.7
)
$
(10.5
)
Net loss per share attributable to common
stockholders, basic and diluted
$
(0.22
)
$
(0.26
)
$
(1.13
)
$
(0.48
)
Weighted-average number of shares
outstanding used to compute net loss per share attributable to
common stockholders, basic and diluted
110,087,581
22,050,904
63,216,912
21,956,848
Owlet, Inc.
Reconciliation of GAAP to
Non-GAAP Measures - Preliminary, Unaudited1
(in millions)
Three Months Ended December
31,
Year Ended December
31,
2021
2020
2021
2020
Net Loss
$
(24.1
)
$
(5.8
)
$
(71.7
)
$
(10.5
)
Income tax provision
—
—
—
—
Interest expense, net
0.4
0.4
1.8
1.4
Interest expense from contingent
beneficial conversion feature
—
—
26.1
—
Depreciation and amortization
0.3
0.3
1.1
0.9
EBITDA
$
(23.3
)
$
(5.2
)
$
(42.7
)
$
(8.2
)
Preferred stock warrant liability
adjustment
—
2.0
5.6
2.0
Common stock warrant liability
adjustment
(10.0
)
—
(15.7
)
—
Stock based compensation
1.9
0.4
4.3
1.1
Transaction costs
—
0.4
5.3
0.4
Loss on extinguishment of debt
—
—
0.2
0.2
Gain on loan forgiveness
—
—
(2.1
)
—
Adjusted EBITDA
$
(31.3
)
$
(2.4
)
$
(45.2
)
$
(4.6
)
Net loss margin
NM
(27.6
) %
(94.5
) %
(14.0
) %
Adjusted EBITDA margin
NM
(11.4
) %
(59.6
) %
(6.1
) %
Owlet, Inc.
Reconciliation of GAAP to
Non-GAAP Measures - Preliminary, Unaudited1
(in millions, except per share
amounts)
Three Months Ended December
31,
Year ended December
31,
2021
2020
2021
2020
Net Loss
$
(24.1
)
$
(5.8
)
$
(71.7
)
$
(10.5
)
Non-GAAP Adjustments:
Interest expense from contingent
beneficial conversion feature
—
—
26.1
—
Preferred stock warrant liability
adjustment
—
2.0
5.6
2.0
Common stock warrant liability
adjustment
(10.0
)
—
(15.7
)
—
Stock based compensation
1.9
0.4
4.3
1.1
Transaction costs
—
0.4
5.3
0.4
Loss on extinguishment of debt
—
—
0.2
0.2
Gain on loan forgiveness
—
—
(2.1
)
—
Adjusted Net Loss
$
(32.1
)
$
(3.0
)
$
(48.2
)
$
(6.9
)
Net loss per share
$
(0.22
)
$
(0.26
)
$
(1.13
)
$
(0.48
)
Adjusted net loss per share
$
(0.29
)
$
(0.14
)
$
(0.76
)
$
(0.31
)
Weighted-average number of shares
outstanding
110,087,581
22,050,904
63,216,912
21,956,848
1Amounts may not sum due to rounding
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220307005720/en/
Investors Mike Cavanaugh ICR
Westwicke Phone: (617) 877-9641 mike.cavanaugh@westwicke.com
Media Jane Putnam Owlet, Inc.
Phone: (801) 647-0025 jputnam@owletcare.com
Sandbridge Aquisition (NYSE:OWLT)
Historical Stock Chart
From Aug 2024 to Sep 2024
Sandbridge Aquisition (NYSE:OWLT)
Historical Stock Chart
From Sep 2023 to Sep 2024