Press Releases
DarioHealth Reports Fourth Quarter and Year End 2018 Record Results
Conference Call Scheduled for 9:00 am ET today
Mar 25, 2019
CAESAREA, Israel, March 25, 2019 /PRNewswire/ -- Global digital therapeutics innovator DarioHealth Corp. (Nasdaq: DRIO), today reported record financial and operational results for the full-year ended on December 31, 2018.
Financial Highlights
- Record annual revenues of $7.4 million, a 43% increase year-over-year (YOY)
- In addition, DarioHealth recorded deferred revenue of $736,000 in 2018
- Record billings (non-GAAP) of $8.13 million, a 57% increase YOY
- Gross profit of $1.77 million, an increase of 35% YOY
- 37% increase in new subscribers YOY
"Throughout 2018, we continued our pioneering role in the burgeoning field of digital therapeutics. We had a number of significant achievements including the introduction of service oriented offerings in the form of membership plans (PMPM), our increase in sales as we shifted to a membership recurring revenue model, improving the average revenue per user (ARPU), obtaining regulatory clearances, and the publication of clinical data evidencing the benefit of our product offerings. We are looking forward to an exciting year in 2019, Q1 is progressing well and we expect continued growth," said Erez Raphael, Chief Executive Officer of DarioHealth.
DarioHealth made significant progress expending from direct-to-consumer (B2C) product sales to a business-to-business (B2B) model in 2018. The company announced several joint initiatives with healthcare providers, distributors, retailers, and payers' channels and expect these initiatives to accelerate our revenue growth in 2019.
The company's successful go to market efforts are reflected in new sales channels such as Amazon, BestBuy and the partnership with Giant Eagle. The company expects further collaborations as it expands its business development efforts in the burgeoning field of digital therapeutics.
During 2018, the company strengthened its management team with the additions of Sequoia Capital partner Yoav Shaked as the Chairman of the Board, and former Bayer Diabetes Care global business head, Olivier Jarry as President and Chief Commercial Officer.
Full Year 2018 Results Summary
For the twelve months ended December 31, 2018, revenues were $7.4 million, a 43% increase from revenues of $5.17 million for the twelve months ended December 31, 2017.
Revenues generated during the year ended December 31, 2018 were derived mainly from the sales of DarioHealth's components and from the offering of our membership plans to our customers in the United States. We recorded an additional $736,000 as deferred revenues from revenues generated from our new membership offering to our customers in the U.S.
Gross profit increased by $454,000, a 35% increase, to a profit of $1.8 million in the twelve months ended December 31, 2018, compared to gross profit of $1.3 million in the twelve months ended December 31, 2017.
Operating loss for the twelve months ended December 31, 2018 increased by $3.3 million to $17.7 million, compared to a $14.4 million operating loss in the twelve months ended December 31, 2017.
The increase in operating loss was mainly due to the increase in operating expenses partially offset by the improvement in the gross profit compared to the twelve months ended December 31, 2017.
Net loss attributable to holders of common stock increased by $2.1 million, a 13% increase, to $17.8 million in the twelve months ended December 31, 2018, compared to $15.7 million in the twelve months ended December 31, 2017.
Non-GAAP billings for the twelve months ended December 31, 2018 were $8.13 million, a 57% increase from $5.17 million in the twelve months ended December 31, 2017. 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."
Fourth Quarter 2018 Results Summary
Revenues for the fourth quarter ended December 31, 2018 were $1.7 million, a 7.7% increase from $1.6 million in the fourth quarter ended December 31, 2017, and a 9.5% decrease sequentially from the third quarter of 2017.
During the fourth quarter ended December 31, 2018, we recorded an additional $351,000 as deferred revenues from revenues generated from our new membership offering to our customers in the U.S.
Gross profit in the fourth quarter of 2018 decreased by $346,000, or 61%, to $223,000 compared to a gross profit of $569,000 in the fourth quarter of 2017.
Operating loss for the fourth quarter ended December 31, 2018 increased by $2.0 million to $5.1 million, compared to a $3.1 million operating loss in the fourth quarter ended December 31, 2017. This increase is mainly due to the increase in our operating expenses.
Net loss attributable to holders of common stock increased by $1.7 million to $5.0 million in the fourth quarter of 2018, compared to $3.3 million in the fourth quarter of 2017.
As of December 31, 2018, cash and cash equivalents totaled $11 million.
Non-GAAP billings for the three months ended December 31, 2018 were $2.0 million, a 30% increase from $1.6 million in the three months ended December 31, 2017. 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."
Conference Call Details:
Date: Monday, March 25, 2019
Time: 9:00 AM EDT
Dial-in Number: 844-602-0380
International Dial-in Number: 862-298-0970
Webcast: https://www.investornetwork.com/event/presentation/45131
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 the first quarter of 2019 is progressing well and that it expects continued growth, describes its expectation that its joint initiatives will accelerate revenue growth in 2019 and its expected future business collaborations. 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.
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 | ||||||||
December 31, | ||||||||
2018 | 2017 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 10,997 | $ | 3,718 | ||||
Short-term restricted bank deposits | 180 | 258 | ||||||
Trade receivables | 168 | 282 | ||||||
Inventories | 1,377 | 1,184 | ||||||
Other accounts receivable and prepaid expenses | 591 | 604 | ||||||
Total current assets | 13,313 | 6,046 | ||||||
LEASE DEPOSITS | 43 | 42 | ||||||
PROPERTY AND EQUIPMENT, NET | 733 | 869 | ||||||
Total assets | $ | 14,089 | $ | 6,957 | ||||
DARIOHEALTH CORP. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
U.S. dollars in thousands (except stock and stock data) | ||||||||
December 31, | ||||||||
2018 | 2017 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Trade payables | $ | 2,574 | $ | 1,852 | ||||
Deferred Revenues | 736 | - | ||||||
Other accounts payable and accrued expenses | 1,854 | 1,163 | ||||||
Total current liabilities | 5,164 | 3,015 | ||||||
LIABILITY RELATED TO WARRANTS | - | 1 | ||||||
STOCKHOLDERS' EQUITY | ||||||||
Common Stock of $0.0001 par value - | 8 | 7 | ||||||
Preferred Stock of $0.0001 par value - | - | - | ||||||
Additional paid-in capital | 98,171 | 74,892 | ||||||
Accumulated deficit | (89,254) | (70,958) | ||||||
Total stockholders' equity | 8,925 | 3,941 | ||||||
Total liabilities and stockholders' equity | $ | 14,089 | $ | 6,957 | ||||
DARIOHEALTH CORP. | ||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||||||
U.S. dollars in thousands (except stock and stock data) | ||||||||
Year ended December 31, | ||||||||
2018 | 2017 | |||||||
Revenues | $ | 7,394 | $ | 5,170 | ||||
Cost of revenues | 5,629 | 3,859 | ||||||
Gross profit | 1,765 | 1,311 | ||||||
Operating expenses: | ||||||||
Research and development | $ | 3,676 | $ | 3,297 | ||||
Sales and marketing | 10,309 | 7,707 | ||||||
General and administrative | 5,468 | 4,726 | ||||||
Total operating expenses | 19,453 | 15,730 | ||||||
Operating loss | 17,688 | 14,419 | ||||||
Financial expenses, net: | ||||||||
Expenses (income) from revaluation of warrants | (1) | 1,168 | ||||||
Other financial expense, net | 116 | 156 | ||||||
Total financial expenses, net | 115 | 1,324 | ||||||
Net loss | $ | 17,803 | $ | 15,743 | ||||
Deemed dividend | 493 | 255 | ||||||
Net loss attributable to holders of Common Stock | $ | 18,296 | $ | 15,998 | ||||
Net loss per share: | ||||||||
Basic and diluted loss per share | $ | 0.78 | $ | 1.64 | ||||
Weighted average number of Common Stock used in computing basic and diluted net loss per share | 23,412,891 | 9,628,256 | ||||||
DARIOHEALTH CORP. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
U.S. dollars in thousands | ||||||||
Year ended | ||||||||
2018 | 2017 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (17,803) | $ | (15,743) | ||||
Adjustments required to reconcile net loss to net cash used in operating activities: | ||||||||
Stock-based compensation and Common Stock to service providers | 3,758 | 3,824 | ||||||
Depreciation | 207 | 195 | ||||||
Decrease (increase) in trade receivables | 114 | (56) | ||||||
Decrease (increase) in other accounts receivable and prepaid expenses | 13 | (99) | ||||||
Increase in inventories | (193) | (295) | ||||||
Increase in trade payables | 722 | 39 | ||||||
Increase in deferred revenues | 736 | - | ||||||
Increase in other accounts payable and accrued expenses | 977 | 334 | ||||||
Change in the fair value of warrants to purchase shares of Common Stock | (1) | 1,168 | ||||||
Revaluation of short-term restricted bank deposits | - | (17) | ||||||
Loss from disposal of fixed assets | - | 31 | ||||||
Net cash used in operating activities | (11,470) | (10,619) | ||||||
Cash flows from investing activities: | ||||||||
Maturity (investment) in short-term restricted bank deposits | 78 | (17) | ||||||
Investment in lease deposit | (1) | (7) | ||||||
Purchase of property and equipment | (71) | (195) | ||||||
Net cash provided by (used in) investing activities | 6 | (219) | ||||||
Cash flows from financing activities: | ||||||||
Proceeds from exercise of warrants | - | *)- | ||||||
Proceeds from issuance of shares and warrants, net of issuance cost | 18,743 | 13,463 | ||||||
Net cash provided by financing activities | 18,743 | 13,463 | ||||||
Increase in cash and cash equivalents | 7,279 | 2,625 | ||||||
Cash and cash equivalents at beginning of year | 3,718 | 1,093 | ||||||
Cash and cash equivalents at end of year | $ | 10,997 | $ | 3,718 | ||||
Non-cash investing and financing activities: | ||||||||
Reclassification of warrants from liability to equity | $ | - | $ | 8,655 | ||||
Payment for executives and directors under Salary Program | $ | 201 | $ | 183 | ||||
(*) Represents an amount lower than $1.
DARIOHEALTH CORP. | ||||||||
Reconciliation of Revenue to Billing (Non-GAAP) | ||||||||
U.S. dollars in thousands | ||||||||
Year Ended December 31, | Three Months Ended December 31, | |||||||
2018 | 2017 | 2018 | 2017 | |||||
GAAP Revenue | 7,394 | 5,170 | 1,700 | 1,578 | ||||
Add: | ||||||||
Change in deferred revenue | 736 | - | 351 | - | ||||
Billing (Non-GAAP) | 8,130 | 5,170 | 2,051 | 1,578 | ||||
DarioHealth Corporate Contact:
Joao Mendes-Roter
VP Marketing
joao@mydario.com
+1-347-767-4220
SOURCE DarioHealth Corp.
