-- 146% YOY growth in Q2 revenue to $2 million
and record 1H revenue of $4.5 million – -- 11 favorable commercial
case-by-case insurance coverage decisions -- -- 217 pending
insurance claims in the U.S. and Germany -- -- Unveiled Restore
soft-exosuit for stroke patients --
ReWalk Robotics Ltd. (Nasdaq:RWLK) (“ReWalk” or “the
Company”) today announced its financial results for the three- and
six-month periods ended June 30, 2017.
Highlights of and subsequent to the second quarter
include:
- Total revenue for the second quarter of 2017 grew 146%
year-over-year to $2 million, compared to $817,000 for the second
quarter of 2016;
- Placed 31 ReWalk units during the second quarter, of which 17
were placed in the U.S., 11 were in our direct markets in Europe,
and three were in other markets;
- Increased pending insurance claims to 217 in the U.S. and
Germany, as of the end of the quarter;
- Secured 11 favorable commercial insurance coverage
decisions;
- Announced a Florida court ruling that Blue Cross Blue Shield of
Florida must provide coverage of a ReWalk exoskeleton system for a
plan member;
- Signed exclusive distribution agreement in France with Harmonie
Medical Service (HMS), one of the largest medical device providers
in the country; and
- Unveiled the Restore lightweight soft-exosuit base design for
clinical studies and commercialization of an initial indication
designed for stroke patients.
“This was another strong quarter for ReWalk as we advanced our
key initiatives: securing insurance reimbursement coverage for the
ReWalk personal device, expanding our global footprint and
progressing our innovative ‘soft suit’ exoskeleton technology
designed for individuals with stroke. We’ve submitted extensive
data for review by a large commercial insurer in the U.S. and await
a decision. We believe that a positive coverage decision
would be an important catalyst for our business and the industry.
It would also reflect the growing consensus among multiple
courts and insurers who have determined, on a case by case basis,
that our technology is not experimental and offers health benefits
to its users,” stated Larry Jasinski, Chief Executive Officer.
“At the same time, we are excited to have introduced our Restore
lightweight ‘soft suit’ design for stroke patients. We plan to
begin clinical studies and pursue regulatory approvals so that we
can commercialize the Restore in 2018, in order to broaden the
reach of our technology to the millions of patients who can benefit
from access to the device,” he added.
Second Quarter 2017 Financial Results
Total revenue was $2 million for the second quarter of 2017, an
increase of 146% compared with $817,000 in the second quarter of
2016. 31 ReWalk units were placed during the second quarter,
compared with 25 ReWalk systems placed in the prior year period, of
which 17 were placed in the U.S., 11 in Europe, and three with
distributors.
Gross margin improved to 37% during the second quarter of 2017
compared to 10% in the prior year period, primarily attributable to
the increase in volume, conversion of rental units to purchases,
and lower product costs.
Total operating expenses in the second quarter of 2017 were $6.1
million compared with $8.7 million in the second quarter of 2016.
Operating expenses in the second quarter of 2017 reflect
initiatives to reduce spending announced earlier in 2017. Second
quarter 2016 expenses include a one-time R&D charge related to
the licensing agreement with the Wyss Institute at Harvard
University.
Net loss was $6.3 million for the second quarter of 2017
compared with a net loss of $9.1 million in the prior year quarter.
Non-GAAP net loss for the second quarter was $4.9 million compared
with a non-GAAP net loss of $8.0 million in the second quarter of
2016.*
*A reconciliation of net loss to non-GAAP net loss is included
at the end of this press release.
Liquidity
As of June 30, 2017, ReWalk had $16.3 million in cash on its
balance sheet.
Conference Call
ReWalk management will host its second quarter conference call
as follows:
Date |
August 3, 2017 |
Time |
8:30 AM EDT |
Telephone |
U.S: |
(844) 423-9889 |
|
International: |
(716) 247-5804 |
|
Israel: |
18 09 45 78 77 |
Access
code |
47740857 |
Webcast
(live and archive) |
www.rewalk.com under
the “Investors” section. |
A telephone replay will be available shortly after the
completion of the call for two weeks at (855) 859-2056 (U.S.) or
(404) 537-3406 (International). The passcode for the replay is
47740857.
About ReWalk
Robotics Ltd. ReWalk Robotics Ltd. develops, manufactures
and markets wearable robotic exoskeletons for individuals with
spinal cord injury. ReWalk’s mission is to fundamentally change the
quality of life for individuals with lower limb disability through
the creation and development of market leading robotic
technologies. Founded in 2001, ReWalk has headquarters in the U.S.,
Israel and Germany. For more information on the ReWalk systems,
please visit www.rewalk.com.
ReWalk® is a registered trademark of ReWalk Robotics Ltd. in
Israel.
Forward-Looking Statements In addition to
historical information, this press release contains forward-looking
statements within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995, Section 27A of the U.S. Securities
Act of 1933, and Section 21E of the U.S. Securities Exchange Act of
1934. Such forward-looking statements may include projections
regarding ReWalk’s future performance and, in some cases, may be
identified by words like “anticipate,” “assume,” “believe,”
“continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,”
“potential,” “predict,” “project,” “future,” “will,” “should,”
“would,” “seek” and similar terms or phrases. The forward-looking
statements contained in this press release are based on
management’s current expectations, which are subject to
uncertainty, risks and changes in circumstances that are difficult
to predict and many of which are outside of ReWalk’s control.
Important factors that could cause ReWalk’s actual results to
differ materially from those indicated in the forward-looking
statements include, among others: ReWalk’s expectations regarding
future growth, including its ability to increase sales in its
existing geographic markets, expand to new markets and achieve its
planned expense reductions; the conclusion of ReWalk’s management
for the financial statements for the second quarter of 2017 and for
fiscal 2016, and the opinion of ReWalk’s auditors in their report
on the Company’s financial statements for fiscal 2016, that there
are substantial doubts as to ReWalk’s ability to continue as a
going concern; ReWalk’s ability to maintain and grow its reputation
and the market acceptance of its products; ReWalk’s ability to
achieve reimbursement from third-party payors for its products;
ReWalk’s expectations as to its clinical research program and
clinical results; ReWalk’s expectations as to the results of, and
the Food and Drug Administration’s potential regulatory
developments with respect to, ReWalk’s mandatory post-market 522
surveillance study; the outcome of ongoing shareholder class action
litigation relating to ReWalk’s initial public offering;
ReWalk’s ability to repay its secured indebtedness; ReWalk’s
ability to improve its products and develop new products; ReWalk’s
ability to maintain adequate protection of its intellectual
property and to avoid violation of the intellectual property rights
of others; ReWalk’s ability to gain and maintain regulatory
approvals; ReWalk’s ability to secure capital from its equity and
debt financings in light of limitations under its Form S-3, the
price range of its ordinary shares and conditions in the financial
markets, and the risk that such financings may dilute ReWalk’s
shareholders or restrict its business; ReWalk’s ability to use
effectively the proceeds of its 2016 follow-on offering; ReWalk’s
ability to maintain relationships with existing customers and
develop relationships with new customers; the impact of the market
price of ReWalk’s ordinary shares on the determination of whether
ReWalk is a passive foreign investment company; ReWalk’s compliance
with medical device reporting regulations to report adverse events
involving its products and the potential impact of such adverse
events on ReWalk’s ability to market and sell its products; and
other factors discussed under the heading “Risk Factors” in
ReWalk’s Annual Report on Form 10-K for the year ended
December 31, 2016, as amended, filed with the U.S. Securities and
Exchange Commission and other documents subsequently filed with or
furnished to the U.S. Securities and Exchange Commission. Any
forward-looking statement made in this press release speaks only as
of the date hereof. Factors or events that could cause ReWalk’s
actual results to differ from the statements contained herein may
emerge from time to time, and it is not possible for ReWalk to
predict all of them. Except as required by law, ReWalk undertakes
no obligation to publicly update any forward-looking statements,
whether as a result of new information, future developments or
otherwise.
Non-GAAP Financial Measures To supplement its
consolidated financial statements, which are prepared and presented
in accordance with U.S. Generally Accepted Accounting Principles
(GAAP), ReWalk believes that the use of non-GAAP net loss is
helpful to its investors. This measure is not prepared in
accordance with GAAP.
For the three- and six-months ended June 30, 2017 and 2016,
non-GAAP net loss is calculated as GAAP net loss excluding (i)
non-cash share-based compensation expense, (ii) depreciation and
(iii) non-cash financial expenses.
Because of varying available valuation methodologies, subjective
assumptions, and the variety of equity instruments that can impact
a company’s non-cash expenses, ReWalk believes that providing
non-GAAP net loss that excludes non-cash share-based compensation
expense, depreciation and non-cash financial (income) expenses
allows for more meaningful comparisons between operating results
from period to period. This non-GAAP financial measure is an
important tool for financial and operational decision-making and
for the Company’s evaluation of its operating results over
different periods of time. Non-GAAP net loss is not a measure of
the Company’s financial performance under U.S. GAAP, and should not
be considered as an alternative to operating loss or net loss or
any other performance measures derived in accordance with GAAP.
Non-GAAP financial measures may not provide information that is
directly comparable to that provided by other companies in ReWalk’s
industry, as other companies in the industry may calculate non-GAAP
financial results differently, particularly related to
non-recurring, unusual items. In addition, there are limitations in
using non-GAAP financial measures in general, because non-GAAP
financial measures are not prepared in accordance with GAAP, may be
different from non-GAAP financial measures used by other companies
and exclude expenses that may have a material impact on the
Company’s reported financial results. Further, share-based
compensation expense has been, and will continue to be for the
foreseeable future, a significant recurring expense in the
Company’s business and an important part of the compensation
provided to its employees. ReWalk urges investors to review the
below reconciliation of the Company’s non-GAAP net loss to net
loss, the comparable GAAP financial measure, and not to rely on any
single financial measure to evaluate the Company’s business.
(tables follow)
ReWalk Robotics Ltd. |
|
Condensed Consolidated Statements of
Operations |
|
In thousands except per share
data |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
Revenue |
$ |
2,007 |
|
|
$ |
817 |
|
|
$ |
4,506 |
|
|
$ |
2,878 |
|
|
Cost of revenues |
|
1,266 |
|
|
|
732 |
|
|
|
2,716 |
|
|
|
2,300 |
|
|
Gross profit |
|
741 |
|
|
|
85 |
|
|
|
1,790 |
|
|
|
578 |
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development, net |
|
1,385 |
|
|
|
3,074 |
|
|
|
2,815 |
|
|
|
4,769 |
|
|
Sales and
marketing |
|
2,873 |
|
|
|
3,504 |
|
|
|
6,006 |
|
|
|
6,803 |
|
|
General
and administration |
|
1,850 |
|
|
|
2,095 |
|
|
|
3,991 |
|
|
|
4,009 |
|
|
Total operating
expenses |
|
6,108 |
|
|
|
8,673 |
|
|
|
12,812 |
|
|
|
15,581 |
|
|
Operating loss |
|
(5,367 |
) |
|
|
(8,588 |
) |
|
|
(11,022 |
) |
|
|
(15,003 |
) |
|
Loss on extinguishment
of debt |
|
313 |
|
|
|
- |
|
|
|
313 |
|
|
|
- |
|
|
Financial expenses,
net |
|
633 |
|
|
|
517 |
|
|
|
1,364 |
|
|
|
1,006 |
|
|
Loss before income
taxes |
|
(6,313 |
) |
|
|
(9,105 |
) |
|
|
(12,699 |
) |
|
|
(16,009 |
) |
|
Income taxes (tax
benefit) |
|
(4 |
) |
|
|
12 |
|
|
|
10 |
|
|
|
30 |
|
|
Net loss |
$ |
(6,309 |
) |
|
$ |
(9,117 |
) |
|
$ |
(12,709 |
) |
|
$ |
(16,039 |
) |
|
Net loss per ordinary
share, basic and diluted |
$ |
(0.37 |
) |
|
$ |
(0.74 |
) |
|
$ |
(0.75 |
) |
|
$ |
(1.30 |
) |
|
Weighted average shares
outstanding, basic and diluted |
|
17,218,154 |
|
|
|
12,403,541 |
|
|
|
16,837,903 |
|
|
|
12,363,698 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP
to Non-GAAP net loss |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(6,309 |
) |
|
$ |
(9,117 |
) |
|
$ |
(12,709 |
) |
|
$ |
(16,039 |
) |
|
Non-cash share based
compensation expense |
|
847 |
|
|
|
826 |
|
|
|
1,698 |
|
|
|
1,543 |
|
|
Depreciation |
|
177 |
|
|
|
164 |
|
|
|
357 |
|
|
|
327 |
|
|
Non-cash financial
expenses |
|
346 |
|
|
|
166 |
|
|
|
379 |
|
|
|
322 |
|
|
Non-GAAP net loss |
$ |
(4,939 |
) |
|
$ |
(7,961 |
) |
|
$ |
(10,275 |
) |
|
$ |
(13,847 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ReWalk Robotics Ltd. |
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance
Sheets |
|
|
|
|
|
|
|
|
|
|
In thousands |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30, |
|
|
December
31, |
|
|
|
|
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
Assets |
|
Unaudited |
|
|
Audited |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
Cash
& cash equivalents |
$ |
16,255 |
|
|
$ |
23,678 |
|
|
|
|
|
|
|
|
Trade
receivable, net |
|
1,114 |
|
|
|
1,254 |
|
|
|
|
|
|
|
|
Prepaid
expenses and other current assets |
|
1,259 |
|
|
|
1,291 |
|
|
|
|
|
|
|
|
Inventory |
|
3,415 |
|
|
|
3,264 |
|
|
|
|
|
|
|
|
Total current
assets |
|
22,043 |
|
|
|
29,487 |
|
|
|
|
|
|
|
|
Other long-term
assets |
|
1,210 |
|
|
|
1,018 |
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
1,068 |
|
|
|
1,258 |
|
|
|
|
|
|
|
|
Total assets |
$ |
24,321 |
|
|
$ |
31,763 |
|
|
|
|
|
|
|
|
Liabilities and
equity |
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Current
maturities of long term loan |
$ |
7,441 |
|
|
$ |
7,495 |
|
|
|
|
|
|
|
|
Trade
payables |
|
2,910 |
|
|
|
3,424 |
|
|
|
|
|
|
|
|
Other
current liabilities |
|
1,462 |
|
|
|
1,479 |
|
|
|
|
|
|
|
|
Total current
liabilities |
|
11,813 |
|
|
|
12,398 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long term
loan |
|
8,537 |
|
|
|
10,518 |
|
|
|
|
|
|
|
|
Other long-term
liabilities |
|
568 |
|
|
|
587 |
|
|
|
|
|
|
|
|
Shareholders'
equity |
|
3,403 |
|
|
|
8,260 |
|
|
|
|
|
|
|
|
Total liabilities and
equity |
$ |
24,321 |
|
|
$ |
31,763 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ReWalk Robotics Ltd. |
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash
Flows |
|
|
|
|
|
|
|
|
|
In thousands |
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended |
|
|
|
|
|
|
|
|
June 30, |
|
|
|
|
|
|
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash
used in operating activities |
$ |
(11,231 |
) |
|
$ |
(13,513 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash
used in investing activities |
|
(22 |
) |
|
|
(395 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash
provided by financing activities |
|
3,830 |
|
|
|
11,725 |
|
|
|
|
|
|
|
|
Decrease
in cash and cash equivalents |
|
(7,423 |
) |
|
|
(2,183 |
) |
|
|
|
|
|
|
|
Cash and
cash equivalents at beginning of period |
|
23,678 |
|
|
|
17,869 |
|
|
|
|
|
|
|
|
Cash and
cash equivalents at end of period |
$ |
16,255 |
|
|
$ |
15,686 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ReWalk Robotics Ltd. |
|
Revenue and Units Placed by Region and
Product |
|
In thousands except units |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six months ended |
|
|
June 30, |
|
June 30, |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
United
States |
$ |
1,342 |
|
|
$ |
527 |
|
|
$ |
3,441 |
|
|
$ |
2,266 |
|
|
Europe |
|
665 |
|
|
|
244 |
|
|
|
1,065 |
|
|
|
504 |
|
|
Asia
Pacific |
|
- |
|
|
|
46 |
|
|
|
- |
|
|
|
108 |
|
|
Total
Revenue |
$ |
2,007 |
|
|
$ |
817 |
|
|
$ |
4,506 |
|
|
$ |
2,878 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units
Placed: |
|
|
|
|
|
|
|
|
|
|
|
|
United
States |
|
17 |
|
|
|
13 |
|
|
|
43 |
|
|
|
39 |
|
|
Europe |
|
14 |
|
|
|
10 |
|
|
|
25 |
|
|
|
15 |
|
|
Asia
Pacific |
|
- |
|
|
|
2 |
|
|
|
- |
|
|
|
3 |
|
|
Total
Units Placed |
|
31 |
|
|
|
25 |
|
|
|
68 |
|
|
|
57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Personal
units revenue |
$ |
1,903 |
|
|
$ |
708 |
|
|
$ |
4,326 |
|
|
$ |
2,679 |
|
|
Rehabilitation units revenue |
|
104 |
|
|
|
109 |
|
|
|
180 |
|
|
|
199 |
|
|
Total
Revenue |
$ |
2,007 |
|
|
$ |
817 |
|
|
$ |
4,506 |
|
|
$ |
2,878 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units
Placed: |
|
|
|
|
|
|
|
|
|
|
|
|
Personal
units placed |
|
30 |
|
|
|
24 |
|
|
|
66 |
|
|
|
55 |
|
|
Rehabilitation units placed |
|
1 |
|
|
|
1 |
|
|
|
2 |
|
|
|
2 |
|
|
Total
Units Placed |
|
31 |
|
|
|
25 |
|
|
|
68 |
|
|
|
57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor Contact:
Lisa M. Wilson
President
In-Site Communications, Inc.
T: 212-452-2793
E: lwilson@insitecony.com
Media Contact:
Jennifer Wlach
Senior Vice President
Mercury LLC
T: 202-261-4000
E: jwlach@mercuryllc.com
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