BOSTON, Aug. 11, 2016 /PRNewswire/ -- DarioHealth Corp. (NASDAQ: DRIO), developer of the Dario™ Blood Glucose Monitoring System, today reported financial and operational results for the three and six month period ended June 30, 2016.

Second Quarter 2016 Highlights

• Record high revenues of $669,000 in the second quarter.
• Successful U.S. direct-to-consumer launch with 4,900 registered users and 2,300 monthly active users at June 30, 2016
• Company rebrands as DarioHealth to reflect expansion of comprehensive digital health and lifestyle offering
• Cash balance of $6.4 million as of June 30, 2016
• Subsequent to quarter end, secured first U.S. distribution partnership with GEMCO Medical
• Subsequent to quarter end, launched direct-to-consumer model in Australia

 

"During the second quarter, we materially advanced the launch of Dario™ in the United States, with a direct-to-consumer model and delivered significant monthly user growth which will position us to increase sales and recurring subscription revenues beginning in the second half of 2016," said Erez Raphael, DarioHealth's Chief Executive Officer. "We are encouraged by the preliminary traction we have made in the U.S. following our soft launch in March. Device sales ramped nicely during the second quarter, and particularly in June when we sold more than 3,000 devices representing 200% growth over the soft launch period. We expect to generate additional market penetration moving forward and this progress has validated our near-term confidence in the U.S. market as a growth driver for DarioHealth."

"Users have been receptive to our digital marketing strategy, and we are reaching consumers in an efficient manner, acquiring users on a ROI positive basis and have seen strong preliminary results converting users into subscribers," Mr. Raphael continued. "Growing our customer base is an important step towards bringing positive changes to people with diabetes, and bringing more attention to our innovative and user centric approach which is disrupting the digital, mHealth and lifestyle market."

Mr. Raphael concluded, "Looking forward we are working to build momentum in the U.S. and around the world. We believe we have the right product and the right strategy to succeed in these efforts and look forward to the opportunities ahead of us. We expect sales in the second half of 2016 to accelerate as a result of increased recurring subscription revenues. The predictable nature of these subscription revenues will also provide us greater visibility into 2017 and serve as the foundation for our long-term growth."

Subsequent to the end of the second quarter, in July, DarioHealth signed an agreement with GEMCO Medical, an established healthcare distributor and a pioneer in the diabetes supply industry, to become the first authorized U.S. distributor of Dario. This partnership will complement the company's direct-to-consumer model to further expand and strengthen its presence in the United States.

Also in July, DarioHealth began offering the Dario Blood Glucose Monitoring System through the direct to the consumer model also in Australia, via its local sponsor IBD Consulting. The company is offering consumers the ability to purchase the Dario All-in-One meter directly online at the website: http://mydario.net.au.  In Australia the device can be used either on iPhone and / or common Android devices and the free App also supports special features such as estimated HbA1C levels which the company believes may enable diabetes management in more proactive way and enable faster and wider penetration in this $200M market.

Financial Results:

Second Quarter Results

For the second quarter ended June 30, 2016, revenues were $669,000, a 282% increase from $175,000 for the quarter ended June 30, 2015 and an 18% increase when compared to $568,000 in the first quarter of 2016. Revenues for the second quarter of 2016 includes product sales to distributors in the United Kingdom, Italy, Australia and Canada and the first full quarter of direct-to-consumer sales in the United States, as well as services provided with respect to DarioHealth's patient management software platform.

GAAP gross margin loss improved by $78,000 to a loss of $157,000 in the second quarter 2016, as compared to a $235,000 gross margin loss in the second quarter of 2015. The reasons behind the negative gross margin are the level of sales and the fact that the Company is initially selling the Dario device at a slight loss to gain market penetration to be able to sell its high-margin recurring revenue strips.

Operating loss for the second quarter ended June 30, 2016 increased by $1.1 million to $2.6 million, as compared to a $1.5 million operating loss in the second quarter ended June 30, 2015. The reason behind the increase is mainly due to commencement of our sales and marketing efforts in the United States.

GAAP net loss attributable to holders of common stock increased by $561,000 to $2.7 million in the second quarter of 2016, as compared to $2.2 million in the second quarter of 2015.

As of June 30, 2016 cash and cash equivalents totaled $6.4 million, compared to $2.7 million at the end of 2015 and $8.3 million at March 31, 2016.

Year to Date Results

For the six months ended June 30, 2016, revenues were $1.2 million, a 411% increase from $242,000 for the six months ended June 30, 2015.

GAAP gross margin loss improved by $206,000 to a loss of $259,000 in the six months ended June 30, 2016, as compared to a $465,000 gross margin loss in the six months ended June 30, 2015.

Operating loss for the six months ended June 30, 2016 increased by $1.2 million to $4.5 million, as compared to a $3.3 million operating loss in the six months ended June 30, 2015.

GAAP net loss attributable to holders of common stock increased by $567,000 to $4.4 million in the six months ended June 30, 2016, as compared to $3.8 million in the six months ended June 30, 2015.

Note on Non-GAAP Measures

Readers should note that DarioHealth has, in  the schedule below, supplemented its GAAP net loss with a Non-GAAP measure of adjusted EBITDA.  Management believes that this Non-GAAP financial measure provides useful supplemental information to management and investors regarding DarioHealth's performance, facilitates a more meaningful comparison of results for the current period with previous operating results, and assists management in analyzing future trends, making strategic and business decisions and establishing internal budgets and forecasts. A reconciliation of Non-GAAP adjusted EBIDTA to GAAP net loss, the most directly comparable GAAP measure is provided in the schedule below.

There are limitations in using this Non-GAAP financial measure because it is not prepared in accordance with GAAP and may be different from Non-GAAP financial measures used by other companies. This Non-GAAP financial measure should not be considered in isolation or as a substitute for GAAP financial measures. Investors and potential investors should consider Non-GAAP financial measures only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP and the reconciliations of the Non-GAAP financial measure provided in the schedule below:

 

About DarioHealth

DarioHealth is a leader in digital health self-management solutions. DarioHealth delivers the ability to combine and analyze consumer health data to personalize treatment and advance medical knowledge. The Dario™ Blood Glucose Monitoring System is a platform for diabetes management that combines an all-in-one blood glucose meter, native smart phone app, website portal and a wide variety of treatment tools to support more proactive and better informed decisions by users living with diabetes, their doctors and healthcare systems.  Having recently launched in the largest market in the world for glucose monitoring, U.S. sales are expected to have a significant impact on revenues and gross margins. With marketing clearance in Europe and the U.S., the Dario iOS mobile app recently launched with reimbursement in the United Kingdom, Australia, Israel, Italy, and Canada, and has also launched in New Zealand, Netherlands, Italy, and Belgium.  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 its growth prospects for the second half of 2016 and beyond, the impact of the U.S. market on the Company's future growth, and that U.S. sales are expected to have a significant impact on revenues and gross margins.  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. 

 

 

 

 

 

 

 

 

 

 

 

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SOURCE DarioHealth Corp.