Full Press Release Details
BOSTON, Nov. 10, 2016 /PRNewswire/ -- DarioHealth Corp. (NASDAQ: DRIO), developer of the Dario™ Blood Glucose Monitoring System, today reported financial and operational results for the three and nine month periods ended September 30, 2016.
Third Quarter 2016 Highlights
Record revenues of $728,000, increased 166% compared to the third quarter of 2015
Gross profit of $76,000 in the third quarter
75% of quarterly revenues derived from test strips and other consumables
More than 5,500 Dario all-in-one smart glucose meter devices were purchased directly by U.S. customers during the third quarter; globally about 8,500 were sold during the quarter
About 70% of strips sales in the U.S. during the quarter were under the subscription plan
Direct-to-consumer model launched in Australia and in Canada
Ramped up inventory to $1.1 million in order to support further market penetration
"During the third quarter, we continued to advance our direct-to-consumer strategy in the U.S., increased device sales, delivered significant monthly user growth and established a predictable stream of high margin recurring subscription revenues from new customers," said Erez Raphael, DarioHealth's Chief Executive Officer. "We are encouraged by the positive engagement we are achieving with new users and expect market penetration and user growth to accelerate in the fourth quarter and in 2016."
"Our active community of users and subscribers is growing every day which is bringing positive changes to people with diabetes, and disrupting the digital, mHealth and lifestyle market," Mr. Raphael concluded. "We have the right product and the right strategy to succeed in these efforts and look forward to the opportunities ahead of us. The predictable nature of these subscription revenues will provide us greater visibility in 2017 and serve as the foundation for our long-term growth."
In July, DarioHealth expanded its direct-to-consumer strategy in Australia, via its local sponsor IBD Consulting. This change in business model in Australia from utilizing distributors to a direct-to-consumer model resulted in minimal revenue contribution from Australia during the third quarter but Australia revenue contribution is expected to resume. The company is offering consumers the ability to purchase the Dario all-in-one smart glucose 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 a more proactive way and enable faster and wider penetration in Australia.
In September, DarioHealth also launched an online store in Canada. The online store was launched in collaboration with A&D Medical, a global leader in connected health and biometric measurement devices and services, and Bayshore Specialty Rx Ltd.'s online pharmacy, Diabetes Express.
Third Quarter 2016 Summary
Revenue for the third quarter of 2016 was $728,000, a 166% increase from $273,000 in third quarter of 2015 and a 9% increase sequentially from the second quarter of 2016.
Revenues for the third quarter of 2016 include direct-to-consumer sales in the United States, as well as partial quarter direct-to-consumer sales and sales to business partners in Australia, and product sales to distributors in the United States, United Kingdom, Italy, Canada, New Zealand and Israel with respect to DarioHealth's patient management software platform. The change in the business model to direct-to–consumer in Australia resulted in minimal revenue contribution from Australia during the third quarter.
Gross profit of $76,000 was recorded in the third quarter of 2016, an increase of $207,000, as compared to a gross loss of $131,000 in the third quarter of 2015. The increase in the gross profit recorded in the third quarter of 2016 is a result of the higher level of sales and the fact that the Company's Dario device is sold at a higher average sale prices.
Operating loss for the third quarter of 2016 increased by $174,000 to $2.7 million, as compared to a $2.5 million operating loss in the third quarter of 2015. This increase is mainly due to increased costs related to our direct sales and marketing efforts in the United States.
Net loss attributable to holders of common stock decreased by $88,000 to $1.7 million in the third quarter of 2016, as compared to $1.8 million in the third quarter of 2015.
As of September 30, 2016, cash and cash equivalents totaled $3.3 million, compared to $2.7 million at the end of 2015.
Year to Date Results
For the nine months ended September 30, 2016, revenues were $1,965,000, a 281% increase from $515,000 for the nine months ended September 30, 2015.
Gross loss improved by $413,000 to a loss of $183,000 in the nine months ended September 30, 2016, as compared to a $596,000 gross loss in the nine months ended September 30, 2015.
Operating loss for the nine months ended September 30, 2016 increased by $1.4 million to $7.3 million, as compared to a $5.8 million operating loss in the nine months ended September 30, 2015.
Net loss attributable to holders of common stock increased by $179,000 to $5.6 million in the nine months ended September 30, 2016, as compared to $5.5 million in the nine months ended September 30, 2015.
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, says that it expects market penetration and user growth to accelerate in the fourth quarter and in 2017, that Australia revenues are expected to resume, that the Company's product and its features may enable faster and wider penetration of the Australia market, 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.
| DARIOHEALTH CORP. | ||||
| CONSOLIDATED BALANCE SHEETS | ||||
| U.S. dollars in thousands | ||||
| September 30, | December 31, | |||
| 2016 | 2015 | |||
| Unaudited | ||||
| ASSETS | ||||
| CURRENT ASSETS: | ||||
| Cash and cash equivalents | $ 3,339 | $ 2,671 | ||
| Short-term bank deposits | 229 | 80 | ||
| Trade receivables | 259 | - | ||
| Inventories | 1,118 | 601 | ||
| Other accounts receivable and prepaid expenses | 610 | 935 | ||
| Total current assets | 5,555 | 4,287 | ||
| LEASE DEPOSITS | 36 | 41 | ||
| PROPERTY AND EQUIPMENT, NET | 1,105 | 749 | ||
| Total assets | $ 6,696 | $ 5,077 |
| DARIOHEALTH CORP. | ||||
| CONSOLIDATED BALANCE SHEETS | ||||
| U.S. dollars in thousands (except stock and stock data) | ||||
| September 30, | December 31, | |||
| 2016 | 2015 | |||
| Unaudited | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) | ||||
| CURRENT LIABILITIES: | ||||
| Trade payables | $ 1,027 | $ 978 | ||
| Deferred revenues | - | 31 | ||
| Other accounts payable and accrued expenses | 1,014 | 681 | ||
| Total current liabilities | 2,041 | 1,690 | ||
| LIABILITY RELATED TO WARRANTS | 295 | 2,610 | ||
| COMMITMENTS AND CONTINGENT LIABILITIES | ||||
| CONVERTIBLE PREFERRED SHARES: | ||||
| Series A Preferred Stock of $0.0001 par value - Authorized: 60,000 shares at September 30, 2016 (unaudited) and December 31, 2015; Issued and Outstanding: None and 1,984 shares at September 30, 2016 (unaudited) and December 31, 2015, respectively; Aggregate liquidation preference of none and $3,560 at September 30, 2016 (unaudited) and December 31, 2015, respectively | - | 2,357 | ||
| STOCKHOLDERS' EQUITY (DEFICIENCY) | ||||
| Common Stock of $0.0001 par value - Authorized: 160,000,000 shares at September 30, 2016 (unaudited) and December 31, 2015; Issued and Outstanding: 5,713,383 and 2,911,788 shares at September 30, 2016 (unaudited) and December 31, 2015, respectively | 6 | 5 | ||
| Preferred Stock of $0.0001 par value - Authorized: 5,000,000 shares at September 30, 2016 (unaudited) and December 31, 2015; Issued and Outstanding: None at September 30, 2016 (unaudited) and December 31, 2015 | - | - | ||
| Additional paid-in capital | 54,077 | 41,769 | ||
| Accumulated deficit | (49,723) | (43,354) | ||
| Total stockholders' equity (deficiency) | 4,360 | (1,580) | ||
| Total liabilities and stockholders' equity (deficiency) | $ 6,696 | $ 5,077 |
| DARIOHEALTH CORP. | |||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||||||||
| U.S. dollars in thousands (except stock and stock data) | |||||||||
| Three months ended September 30 | Nine months ended September 30 | ||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||
| Unaudited | Unaudited | ||||||||
| Revenues | $ 728 | $ 273 | $ 1,965 | $ 515 | |||||
| Cost of revenues | 652 | 404 | 2,148 | 1,111 | |||||
| Gross (profit) loss | (76) | 131 | 183 | 596 | |||||
| Operating expenses: | |||||||||
| Research and development | $ 659 | $ 667 | $ 1,577 | $ 1,991 | |||||
| Sales and marketing | 1,533 | 417 | 3,194 | 931 | |||||
| General and administrative | 605 | 1,332 | 2,313 | 2,318 | |||||
| Total operating expenses | 2,797 | 2,416 | 7,084 | 5,240 | |||||
| Operating loss | 2,721 | 2,547 | 7,267 | 5,836 | |||||
| Financial expenses (income), net: | |||||||||
| Revaluation of warrants | (1,658) | (753) | (2,315) | (377) | |||||
| Other financial expense, net | 678 | 35 | 697 | 11 | |||||
| Total financial expenses (income), net | (980) | (718) | (1,618) | (366) | |||||
| Net loss | $ 1,741 | $ 1,829 | $ 5,649 | $ 5,470 | |||||
| Deemed dividend related to warrants exchange agreement | $ - | $ - | $ - | $ 154 | |||||
| Deemed dividend related to Series A Preferred Stock exchange agreement | $ - | $ - | $ 455 | $ - | |||||
| Deemed dividend related to extension of July 2015 Series A warrants in July 2016 | $ 265 | $ - | $ 265 | $ - | |||||
| Net loss attributable to holders of Common Stock | $ 2,006 | $ 1,829 | $ 6,369 | $ 5,624 | |||||
| Net loss per share | |||||||||
| Basic and diluted loss per share | $ (0.31) | $ (0.90) | $ (1.13) | $ (3.42) | |||||
| Weighted average number of Common Stock used in computing basic and diluted net loss per share | 5,705,229 | 2,079,622 | 5,019,918 | 1,657,550 |
| DARIOHEALTH CORP. | ||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
| U.S. dollars in thousands | ||||
| Nine months ended September 30, | ||||
| 2016 | 2015 | |||
| Unaudited | ||||
| Cash flows from operating activities: | ||||
| Net loss | $ (5,649) | $ (5,470) | ||
| Adjustments required to reconcile net loss to net cash used in operating activities: | ||||
| Stock-based compensation and Common Stock to service providers | 1,564 | 1,439 | ||
| Depreciation | 273 | 248 | ||
| Decrease (increase) in accounts receivables | (257) | - | ||
| Decrease (increase) accounts receivables and prepaid expenses | 80 | (120) | ||
| Decrease (increase) in inventories | (517) | (81) | ||
| Increase in trade payables | 49 | 183 | ||
| Increase (decrease) in deferred revenues | (31) | 30 | ||
| Increase (decrease) in other accounts payable and accrued expenses | 283 | (58) | ||
| Increase (decrease) in the fair value of warrants | (2,315) | (377) | ||
| Capital loss from disposal of fixed assets | - | (8) | ||
| Net cash used in operating activities | (6,520) | (4,214) | ||
| Cash flows from investing activities : | ||||
| Proceeds of maturities of short-term bank deposit | - | 333 | ||
| Investment in short-term bank deposit | (155) | (330) | ||
| Investment in restricted cash | - | (10) | ||
| Maturity of lease deposits | 1 | 12 | ||
| Purchase of property and equipment | (406) | (70) | ||
| Net cash used in investing activities | (560) | (65) | ||
| Cash flows from financing activities : | ||||
| Proceeds from issuance of Common Stock and warrants, net of issuance cost | 7,538 | 1,956 | ||
| Proceeds from issuance of Common Stock and warrants, net of issuance cost | - | 2,325 | ||
| Proceeds from conversion of warrants, net of issuance cost | - | 453 | ||
| Proceeds from exercise of options and warrants | 210 | *) - | ||
| Net cash provided by financing activities | 7,748 | 4,734 | ||
| Increase in cash and cash equivalents | 668 | 455 | ||
| Cash and cash equivalents at the beginning of the period | 2,671 | 1,453 | ||
| Cash and cash equivalents at the end of the period | $ 3,339 | $ 1,908 | ||
| Non-cash investing and financing activities : | ||||
| Purchase of property and equipment | $ - | $ 26 | ||
| Conversion of Series A Preferred Stock into Common Stock | $ 2,277 | $ 400 | ||
| Payment for directors under Salary Program | $ 154 | $ 192 | ||
| *) Represents an amount lower than $1 |
| Press | Investor Relations |
| Shmuel Herschberg DarioHealth Corp. | Rob Fink/Brett Mass Hayden IR |
| +1-800-896-9062 | +1-646-415-8972/+1-646-536-7331 |
| [email protected] | [email protected] |
SOURCE DarioHealth Corp.
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