DarioHealth Reports Second Quarter 2020 Results
NEW YORK, Aug. 12, 2020 /PRNewswire/ -- DarioHealth Corp. (Nasdaq: DRIO), a pioneer in the global digital therapeutics market, today reported financial results for the second quarter 2020 and provided a corporate and commercial update.
http://mma.prnewswire.com/media/544126/DarioHealth_Logo.jpg
"The COVID-19 pandemic has accelerated our ongoing transformation to a business-to-business-to-consumer (B2B2C) digital therapeutics leader," said Erez Raphael, Chief Executive Officer of Dario. "We advanced late-stage discussions with health plans and self-insured employers, who we believe recognize how our industry-leading user engagement and satisfaction metrics lead to improved health for their member and employee populations. Our pipeline continues to grow and mature, and although the normal sales cycle can be lengthy, we believe that we are poised to announce new and potentially transformational agreements in the next few weeks."
"At the same time, our Remote Patient Monitoring (RPM) product offering, which was just recently introduced, is seeing significant traction as evidenced by recently announced agreements in the U.S. and U.K. with more potential agreements in the pipeline."
"We believe that the expert webinar that we hosted in June featuring Key Opinion Leader (KOL) Dr. David Simmons, a diabetologist with 45 years of experience, reinforced the importance of digital therapeutics as a complement to current standards of care across the entire spectrum of chronic medical conditions. His work and expertise highlighted how behavior change, the core of the Dario platform, is at the root of improved health for the type 2 diabetes (T2D) population. At the American Diabetes Association's 80(th) Scientific Sessions, Dario added to its growing body of evidence with its presentation of the results of two studies demonstrating that digital therapeutics deliver tangible, sustainable health benefits to patients and cost savings to payers."
"We believe that recent industry mergers and acquisitions transactions are indicative of the value that is being created in digital therapeutics. As a platform that aids in chronic condition management while facilitating acute care interactions, we believe that Dario has the potential to be a leading platform in the future virtual healthcare world. With a flexible, software based recurring revenue model that can scale, we believe that Dario can deliver improved care and reduce systemwide costs for the most expensive patient populations. We are proud to be a leading innovator in this important and emerging field."
"With the successful $28.6 million financing that we completed last month, we believe we have the resources in place to achieve significant commercial milestones that we believe will drive accelerating growth and continued improvement of our margins," Zvi Ben-David, Dario's Chief Financial Officer added. "In addition, we will continue to improve our platform through enhanced personalization with artificial intelligence (AI), improved efficacy in combination with Continuous Glucose Monitoring (CGM) and expanded breadth of offering for other chronic health conditions."
A replay of Dario's KOL webinar can be found here.
Business Update Q2 2020 and Recent Highlights
Opening B2B2C Channels: Commercial Development & Strategic Collaborations
-- Announced two Remote Patient Monitoring (RPM) agreements in the U.S.,
allowing healthcare providers to monitor patients between office visits
while utilizing new CMS reimbursement codes, an added source of revenue
-- Entered the U.K. RPM market through an agreement with Williams Medical,
making Dario's RPM platform available to healthcare professionals
throughout the U.K. and Ireland
Clinical Evidence Development
-- Hosted a webinar featuring KOL Dr. David Simmons who espoused the
importance of digital therapeutics as a complement to traditional care
for the long-term management and treatment of patients with diabetes and
other chronic diseases
-- Participated in the Virtual Going Digital: Behavioral Health Tech Summit
which featured a presentation by Dario's Chief Medical Officer, Dr. Omar
Manejwala, entitled, "Behavioral Health at Scale."
-- Presents new studies demonstrating sustained improvements in blood
glucose and blood pressure control in users with diabetes and
hypertension at the American Diabetes Association's 80th Scientific
Sessions
Corporate Developments
-- Appointed Dennis Matheis, President of Optima Health, a health plan with
more than 850,000 members, to its Board of Directors, further supporting
our ongoing transition to B2B2C
-- Successfully raised gross proceeds of $28.6 million through a private
placement of its common shares and pre-funded warrants
Second Quarter 2020 Results Summary
Financial Results for the Three Months Ended June 30, 2020:
Revenues for the second quarter ended June 30, 2020 were $1.79 million, a 7.2% sequential increase from first quarter ended March 31, 2020, and an 8.2% increase from the $1.65 million in the second quarter ended June 30, 2019.
Revenues generated during the second quarter ended June 30, 2020 were derived mainly from the sales of DarioHealth's products and from the offering of our membership plans to our customers in the U.S.
At the end of the second quarter ended June 30, 2020, we accumulated deferred income of $1.27 million that we expect to recognize during the next four fiscal quarters.
Gross profit in the second quarter ended June 30, 2020 was $636,000, an increase of $310,000, or 95%, compared to gross profit of $326,000 in the second quarter ended June 30, 2019. This increase is mainly a result of an increase in revenues generated from our membership offering and a decrease in product costs in the second quarter.
Total operating expenses for the second quarter ended June 30, 2020 were $4.8 million, a decrease of $0.9 million, or 16.3%, compared with $5.7 million for the second quarter ended June 30, 2019. The decrease in the operating expenses was mainly due the decrease in equity-based compensation to directors, employees and service providers.
Operating loss for the second quarter ended June 30, 2020 was $4.1 million, a decrease of $1.2 million, or 23%, compared to a $5.3 million operating loss in the second quarter ended June 30, 2019. This decrease was mainly due to the increase in our gross profit and decrease in our operating expenses.
Net loss attributable to holders of common stock was $4.8 million, or $0.68 per share, in the second quarter ended June 30, 2020, compared to the $5.4 million net loss, or $2.50 per share, in the second quarter ended June 30, 2019.
We had cash and cash equivalents totaling $13.2 million at June 30, 2020.
Non-GAAP billings for the three months ended June 30, 2020 were $1.79 million, a 2.2% decrease from $1.75 million reported in the three months ended June 30, 2019.
Non-GAAP adjusted net loss for the second quarter ended June 30, 2020 was $3.25 million, a 23.7% decrease from a $4.26 million non-GAAP adjusted net loss for the three months ended June 30, 2019.
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."
Financial Results for the Six Months Ended June 30, 2020:
Revenue for the six months ended June 30, 2020 was $3.45 million, an 11.3% decrease from $3.89 million for the six months ended June 30, 2019. We recorded an additional $47,000 as deferred revenues from revenues generated from our membership offering to our customers in the U.S. This decrease is mainly a result of a decrease in our direct to consumer revenues in the first quarter of 2020 compared to the first quarter of 2019.
Gross profit of $1.4 million was recorded for the six months ended June 30, 2020, an increase of 60% or $531,000 compared to gross profit of $884,000 for the six months ended June 30, 2019. This increase is mainly a result of an increase in revenues generated from our membership offering and a corresponding decrease in product sales.
Operating loss for the six months ended June 30, 2020 increased by $3.5 million to $14.2 million, compared to an $10.7 million operating loss for the six months ended June 30, 2019. This increase is a result from an increase in our equity based compensation, consulting, investor relations and insurance expenses partially offset by an increase in our gross profit.
Net loss was $13.9 million for the six months ended June 30, 2020 compared to a net loss of $10.7 million for the six months ended June 30, 2019. The increase in net loss for the six months ended June 30, 2020 compared to the six months ended June 30, 2019 was mainly due to an increase in operating expenses.
Non-GAAP billings for the six months ended June 30, 2020 were $3.5 million, a 23% decrease from $4.55 million in the six months ended June 30, 2019.
Non-GAAP adjusted net loss for the six months ended June 30, 2020 was $7 million, a 24.7% decrease from a $9.3 million non-GAAP adjusted net loss for the three months ended June 30, 2019.
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: Wednesday, August 12, 9:00am EDT
Dial-in Number: 1-844-369-8770
International Dial-in: 1-862-298-0840
Conference ID: DarioHealth Second Quarter 2020 Earnings Call and Webcast
Webcast: https://www.webcaster4.com/Webcast/Page/2224/36466
Participants are asked to dial-in approximately 10 minutes prior to the start of the event. A replay of the call will be available approximately two hours after completion through August 26, 2020. To listen to the replay, dial 1-877-481-4010 (domestic) or 1-919-882-2331 (international) and use replay passcode 36466. The webcast replay will be available through November 12, 2020.
About DarioHealth Corp.
DarioHealth Corp. (Nasdaq: DRIO) is a leading, global digital therapeutics company revolutionizing the way people with chronic conditions manage their health. By delivering evidence-based interventions that are driven by data, high-quality software and coaching, we empower individuals to make healthy adjustments to their daily lifestyle choices to improve their overall health. Our cross-functional team operates at the intersection of life sciences, behavioral science and software technology to deliver highly engaging therapeutic interventions. Dario is one of the highest-rated diabetes solutions in the market, and its user-centric MyDario(TM) mobile app is loved by tens of thousands of consumers around the globe. DarioHealth is rapidly moving into new chronic conditions and geographic markets, using a performance-based approach to improve the health of users managing chronic disease. To learn more about DarioHealth and its digital health solutions, 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 it discusses its belief that health plans and self-insured employers that are engaged in late-stage discussions with it, recognize its industry-leading user engagement and satisfaction metrics lead to improved health for their member and employee populations, that its pipeline continues to grow and mature, and that it is poised to announce new and potentially transformational agreements in the next few weeks, that its RPM product offering is seeing significant traction as evidenced by recently announced agreements in the U.S. and U.K. with more potential agreements in the pipeline, the belief that the previously hosted expert webinar reinforced the importance of digital therapeutics as a complement to current standards of care across the entire spectrum of chronic medical conditions, that Dario added to its growing body of evidence with its presentation at the American Diabetes Association's 80(th) Scientific Sessions of the results of two studies demonstrating that digital therapeutics deliver tangible, sustainable health benefits to patients and cost savings to payers, the belief that recent industry mergers and acquisitions serve as another important validation of the value that is being created in the field of digital therapeutics, its belief that it has the potential to be a leading platform in the future virtual healthcare world, the belief that with a flexible, software based recurring revenue model that can scale, its belief that it can deliver improved care and reduce systemwide costs for the most expensive patient populations and its belief that it has the resources to achieve significant commercial milestones that it believes will drive accelerating growth and continued improvement of its 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(TM) 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.
Operating expenses (non-GAAP). Our presentation of non-GAAP operating expenses excludes stock-based compensation expenses. Due to varying available valuation methodologies, subjective assumptions, and the variety of equity instruments that can impact a company's non-cash operating expenses, we believe that providing non-GAAP financial measures that exclude non-cash expense provides us with an important tool for financial and operational decision making and for evaluating our own core business operating results over different periods of time.
Net loss (non-GAAP). Our presentation of adjusted net loss excludes the effect of certain items that are non-GAAP financial measures. Adjusted net loss represents net loss determined under GAAP without regard to stock-based compensation expenses, deferred inventory and depreciation of fixed assets. We believe these measures provide useful information to management and investors for analysis of our operating results.
DARIOHEALTH
CORP.
---
CONSOLIDATED
BALANCE
SHEETS
---
U.S.
dollars in
thousands
June 30, December 31,
2020 2019
Unaudited
ASSETS
CURRENT
ASSETS:
Cash and
cash
equivalents $
13,182 $
20,395
Short-term
restricted
bank
deposits 177 191
Trade
receivables 624 672
Inventories 1,341 1,414
Other
accounts
receivable
and
prepaid
expenses 483 267
Total
current
assets 15,807 22,939
---
NON-
CURRENT
ASSETS:
Deposits 19 17
Operating
lease
right of
use assets 603 765
Long-term
assets 181 200
Property
and
equipment,
net 597 648
Total non-
current
assets 1,400 1,630
---
Total
assets $
17,207 $
24,569
---
DARIOHEALTH CORP.
---
CONSOLIDATED BALANCE SHEETS
---
U.S. dollars in thousands (except stock and stock data)
June 30, December 31,
2020 2019
Unaudited
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables $
1,579 $
1,656
Deferred revenues 1,270 1,223
Operating lease liabilities 287 317
Other accounts payable and accrued expenses 1,526 2,024
Total current liabilities 4,662 5,220
---
OPERATING LEASE LIABILITIES 319 455
STOCKHOLDERS' EQUITY
Common Stock of $0.0001 par value -
*)-
*)-
Authorized: 160,000,000 shares at June 30, 2020 (unaudited)and
December 31, 2019; Issued and Outstanding: 4,099,091 and 2,235,649
shares at June 30, 2020 (unaudited) and December 31, 2019,
respectively **)
Preferred Stock of $0.0001 par value -
*)-
*)-
Authorized: 5,000,000 shares at June 30, 2020 (unaudited) and
December 31, 2019; Issued and Outstanding: 17,398 and 21,375 shares
at June 30, 2020 (unaudited) and December 31, 2019, respectively
Additional paid-in capital 138,330 129,039
Accumulated deficit (126,104) (110,145)
Total stockholders' equity 12,226 18,894
---
Total liabilities and stockholders' equity $
17,207 $
24,569
---
DARIOHEALTH CORP.
---
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
---
U.S. dollars in thousands (except stock and stock data)
Three months ended Six months ended
June 30 June 30
2020 2019 2020 2019
Unaudited
Unaudited
Revenues $
1,787 $
1,651 $
3,454 $
3,893
Cost of revenues 1,151 1,325 2,039 3,009
Gross profit 636 326 1,415 884
Operating expenses:
Research and development $
825 $
991 $
2,056 $
1,993
Sales and marketing 2,608 2,993 6,699 6,939
General and administrative 1,326 1,704 6,897 2,677
Total operating expenses 4,759 5,688 15,652 11,609
Operating loss (4,123) (5,362) (14,237) (10,725)
Total financial expense (income), net (117) 20 (339) 33
Net loss $
(4,006) $
(5,382) $
(13,898) $
(10,758)
Deemed dividend $
786
$ $
2,061
$
Net loss attributable to holders of Common Stock $
(4,792) $
(5,382) $
(15,959) $
(10,758)
Net loss per Common Stock:
Basic and diluted net loss per Common Stock $
(0.68) $
(2.50) $
(2.33) $
(5.43)
Weighted average number of 4,121,965 2,125,991 3,606,378 1,982,720
shares of Common Stock used in computing basic and
diluted net loss per Common Stock**)
DARIOHEALTH CORP.
---
CONSOLIDATED STATEMENTS OF CASH FLOWS
---
U.S. dollars in thousands
Six months ended
June 30,
2020 2019
Unaudited
Cash flows from operating activities:
---
Net loss $
(13,898) $
(10,758)
Adjustments required to reconcile net loss to net cash used in operating
activities:
Stock-based compensation, common stock, and stock instead of cash 7,178 1,310
compensation to directors, employees, consultants, and service
providers
Depreciation 92 93
Change in operating lease right of use assets 162 130
Decrease (increase) in trade receivables 48 (110)
Decrease (increase) in accounts receivables and prepaid expenses and (197) 38
long-term assets
Decrease (increase) in inventories 73 (442)
Decrease in trade payables (77) (190)
Decrease in other accounts payable and accrued expenses (446) (131)
Increase in deferred revenues 47 662
Change in operating lease liabilities (166) (93)
Net cash used in operating activities (7,184) (9,491)
Cash flows from investing activities:
---
Investment in deposit (2) (1)
Purchase of property and equipment (41) (71)
Net cash used in investing activities (43) (72)
Cash flows from financing activities:
---
Proceeds from issuance of Common Stock, Preferred Stock and 6,558
warrants, net of issuance cost
Net cash provided by financing activities 6,558
Decrease in cash, cash equivalents and short-term restricted bank deposits (7,227) (3,005)
Cash, cash equivalents and short-term restricted bank deposits at 20,535 11,126
beginning of the period
Cash, cash equivalents and short-term restricted bank deposits at end of $
13,308 $
8,121
the period
Reconciliation of
Revenue to Billing
(Non-GAAP)
---
U.S. dollars in
thousands
Three Months Ended Six Months Ended
June 30, June 30,
2020 2019 2020 2019
GAAP Revenue $1,787 $1,651 $3,454 $3,893
Add:
Change in Deferred
Revenue $5 $102 $47 $662
Billings (Non-GAAP) $1,792 $1,753 $3,501 $4,555
Reconciliation of Operating Loss, Net Loss and Operating Expenses to Adjusted
Operating Loss, Net Loss and Operating Expenses (Non-GAAP)
---
U.S. dollars in thousands
Three months ended June 30, 2020
GAAP Stock-Based Depreciation
of Non-GAAP
Compensation Fixed Assets
and
Expenses Deferred
Inventory
---
Cost of Revenues $
1,151 $
(5) $
(35) $
1,111
Gross Profit 636 5 35 676
Research and development 825 (109) (1) 715
Sales and Marketing 2,608 (198) (1) 2,409
General and Administrative 1,326 (510) (16) 800
Total Operating Expenses 4,759 (817) (18) 3,924
Operating Loss $
(4,123) $
822 $
53 $
(3,248)
Financing income (117) (117)
Net Loss $
(4,006) $
822 $
53 $
(3,131)
Three months ended June 30, 2019
GAAP Stock-Based Depreciation
of Non-GAAP
Compensation Fixed Assets
Expenses
---
Cost of Revenues $
1,325 $
(43) $
(27) $
1,255
Gross Profit 326 43 27 396
Research and development 991 (66) 925
Sales and Marketing 2,993 (46) (1) 2,946
General and Administrative 1,704 (898) (19) 787
Total Operating Expenses 5,688 (1,010) (20) 4,658
Operating Loss $
(5,362) $
1,053 $
47 $
(4,262)
Financing expenses 20 20
Net Loss $
(5,382) $
1,053 $
47 $
(4,282)
Six months ended June 30, 2020
GAAP Stock-Based Depreciation
of Non-GAAP
Compensation Fixed Assets
and
Expenses Deferred
Inventory
---
Cost of Revenues $
2,039 $
(20) $
(78) $
1,941
Gross Profit 1,415 20 78 1,513
Research and development 2,056 (446) (3) 1,607
Sales and Marketing 6,699 (1,749) (1) 4,949
General and Administrative 6,897 (4,963) (32) 1,902
Total Operating Expenses 15,652 (7,158) (36) 8,458
Operating Loss $
(14,237) $
7,178 $
114 $
(6,945)
Financing income (339) (339)
Net Loss $
(13,898) $
7,178 $
114 $
(6,606)
Six months ended June 30, 2019
GAAP Stock-Based Depreciation
of Non-GAAP
Compensation Fixed Assets
Expenses
---
Cost of Revenues $
3,009 $
(57) $
(56) $
2,896
Gross Profit 884 57 56 997
Research and development 1,993 (111) 1,882
Sales and Marketing 6,939 (95) (1) 6,843
General and Administrative 2,677 (1,047) (36) 1,594
Total Operating Expenses 11,609 (1,253) (37) 10,319
Operating Loss $
(10,725) $
1,310 $
93 $
(9,322)
Financing expenses 33 33
Net Loss $
(10,758) $
1,310 $
93 $
(9,355)
DarioHealth Corporate Contact:
Claudia Levi
Content & Communications Manager
claudia@mydario.com
+1-347-767-4220
Media Inquiries:
Investor Relations Contact:
Chuck Padala
chuck@lifesciadvisors.com
+1-646-627-8390
View original content:http://www.prnewswire.com/news-releases/dariohealth-reports-second-quarter-2020-results-301110693.html
SOURCE DarioHealth Corp.
