ReWalk Robotics Ltd. (Nasdaq: RWLK) (“ReWalk” or the “Company”)
today announced its financial results for the three and six months
ended June 30, 2020.
Highlights of and subsequent to the second quarter of
2020 include:
- Total revenue for the second
quarter of 2020 was $1.7 million, compared to $0.9 million in the
prior year quarter;
- Record Gross Margin of approx. 61.3% compared to 49.6% in the
prior year quarter;
- Raised total of $10.6 million in
gross proceeds from warrants exercise during the second quarter and
a subsequent registered direct offering in July; and
- The Centers for Medicare and
Medicaid Services ("CMS") issued Healthcare Common Procedure Coding
System ("HCPCS") Level II Code K1007 in response to the Company's
application. This decision, which will be effective on October
1, 2020, establishes the first such code for exoskeletons.
“We are satisfied with the progress we made
during the second quarter” said Larry Jasinski, Chief Executive
Officer of ReWalk, “Although we face challenges due to the impact
of COVID-19, we were able to complete deliveries in Germany and the
U.S., We have achieved a quarterly record gross margin, during
July, we started promoting our two new distributed product lines
and we set the basis for U.S. reimbursement with the achievement of
the CMS code. We believe we are on the right track to improve our
operating results and market value.”
Second Quarter 2020 Financial Results
Total revenue was $1.7 million for the second quarter of 2020,
compared to $0.9 million during the prior year quarter. The
increase was mainly due to a higher number of ReWalk Personal 6.0
units sold in Germany and the U.S which included several units that
we could not complete their delivery during the first quarter of
2020 because of the Covid-19 restrictions.
Gross margin was 61.3% during the second quarter
of 2020, compared to 49.6% in the prior year quarter. The increase
is primarily due to higher number of units placed and increase in
average selling price.
Total operating expenses in the second quarter
of 2020 were $3.6 million, compared to $4.7 million in the prior
year quarter. The decrease was mainly due to lower R&D spend as
we completed the development of our ReStore® device.
Net loss was $2.9 million for the second quarter
of 2020, compared to a net loss of $4.6 million in the prior year
quarter.
Non-GAAP net loss was $2.7 million for the
second of 2020 compared to $4.2 million during the prior year
quarter. Reconciliation of net loss to non-GAAP net loss is
included at the end of this press release.
Liquidity
As of June 30, 2020, ReWalk had $14.1 million in cash on its
balance sheet and $4.8 million in short- and long-term debt. During
July ReWalk closed a registered direct offering of ordinary shares
and a concurrent private placement of unregistered warrants to
purchase ordinary shares for approximately $9 million in gross
proceeds.
Conference Call
ReWalk management will host its second quarter 2020 conference
call as follows:
Date |
Wednesday, August 12,
2020 |
Time |
8:30 AM EDT |
Telephone |
U.S: |
(844) 423-9889 |
|
International: |
(716) 247-5804 |
|
Israel: |
18 09 31 53 62 |
|
Germany: |
08 00 18 15 287 |
Access code |
9366548 |
Webcast (live,
listen-only and archive) |
www.rewalk.com under the
“Investors” section. |
The archived webcast will be available via the following URL
https://edge.media-server.com/mmc/p/5i2w4ds5 or through the
'Investors' section' on www.rewalk.com.
About ReWalk Robotics Ltd.
ReWalk Robotics Ltd. develops, manufactures, and
markets wearable robotic exoskeletons for individuals with lower
limb disabilities as a result of spinal cord injury or
stroke. 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 and the United States.
ReStore® is a registered trademark of ReWalk Robotics Ltd. in
Europe and an allowed trademark in the United States.
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 other statements that are not
statements of historical fact 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 management’s conclusion,
and its independent registered public accounting firm’s statement
in its opinion relating to its consolidated financial statements
for the fiscal year ended December 31, 2019, that there is a
substantial doubt as to the Company’s ability to continue as a
going concern; the current COVID-19 pandemic has adversely affected
and may continue to affect adversely business and results of
operations; ReWalk’s ability to have sufficient funds to meet
certain future capital requirements, which could impair the
Company’s efforts to develop and commercialize existing and new
products; ReWalk’s ability to maintain compliance with the
continued listing requirements of the Nasdaq Capital Market and the
risk that its ordinary shares will be delisted if it cannot do
so; ReWalk’s ability to establish a pathway to commercialize
its products in China; 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 limited operating history and its ability to
leverage its sales, marketing and training infrastructure; ReWalk’s
expectations as to its clinical research program and clinical
results; ReWalk’s expectations regarding future growth, including
its ability to increase sales in its existing geographic markets
and expand to new markets; ReWalk’s ability to obtain certain
components of its products from third-party suppliers and its
continued access to its product manufacturers; ReWalk’s ability to
repay its secured indebtedness; ReWalk’s ability to improve its
products and develop new products; the outcome of ongoing
shareholder class action litigation relating to its initial public
offering; ReWalk’s compliance with medical device reporting
regulations to report adverse events involving the Company’s
products, which could result in voluntary corrective actions or
enforcement actions such as mandatory recalls, and the potential
impact of such adverse events on ReWalk’s ability to market and
sell its products; ReWalk’s ability to gain and maintain regulatory
approvals; ReWalk’s expectations as to the results of, and the Food
and Drug Administration’s potential regulatory developments with
respect to its mandatory 522 postmarket surveillance study;
ReWalk’s ability to maintain adequate protection of its
intellectual property and to avoid violation of the intellectual
property rights of others; the risk of a cybersecurity attack or
breach of the Company’s IT systems significantly disrupting its
business operations; the impact of substantial sales of the
Company’s shares by certain shareholders on the market price of the
Company’s ordinary shares; ReWalk’s ability to use effectively the
proceeds of its offerings of securities; the risk of substantial
dilution resulting from the periodic issuances of ReWalk’s ordinary
shares; the impact of the market price of the Company’s ordinary
shares on the determination of whether it is a passive foreign
investment company; and other factors discussed under the heading
“Risk Factors” in ReWalk’s annual report on Form 10-K for the year
ended December 31, 2019 filed with the SEC and other documents
subsequently filed with or furnished to the SEC. 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 accounting measures, including
non-GAAP net loss, is helpful to its investors. These measures,
which the Company refers to as non-GAAP financial measures, are not
prepared in accordance with GAAP.
For the three and six months ended June 30, 2020
and 2019, 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 financial measures that exclude
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. Each
of the Company’s non-GAAP financial measures 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.
The non-GAAP financial data are not measures of the Company’s
financial performance under U.S. GAAP, and should not be considered
as alternatives 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 because the 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.
The presentation of non-GAAP financial
information is not meant to be considered in isolation or as a
substitute for the directly comparable financial measures prepared
in accordance with GAAP. ReWalk urges investors to review the
reconciliation of the Company’s non-GAAP financial measures to the
comparable GAAP financial measures included below, and not to rely
on any single financial measure to evaluate the Company’s
business.
Investor Contact: Ori GonChief Financial Officer ReWalk
Robotics Ltd. T: +972-4-9590123
E: investorrelations@rewalk.com
|
ReWalk Robotics Ltd. And subsidiaries |
Condensed Consolidated Statements of
Operations |
(unaudited) |
(In thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
1,668 |
|
|
$ |
877 |
|
|
$ |
2,428 |
|
|
$ |
2,458 |
|
Cost of revenues |
|
646 |
|
|
|
442 |
|
|
|
1,033 |
|
|
|
1,097 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
1,022 |
|
|
|
435 |
|
|
|
1,395 |
|
|
|
1,361 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development, net |
|
954 |
|
|
|
1,860 |
|
|
|
1,939 |
|
|
|
3,274 |
|
Sales and marketing |
|
1,353 |
|
|
|
1,531 |
|
|
|
3,034 |
|
|
|
3,118 |
|
General and administrative |
|
1,267 |
|
|
|
1,279 |
|
|
|
2,576 |
|
|
|
2,779 |
|
Total operating expenses |
|
3,574 |
|
|
|
4,670 |
|
|
|
7,549 |
|
|
|
9,171 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
(2,552 |
) |
|
|
(4,235 |
) |
|
|
(6,154 |
) |
|
|
(7,810 |
) |
Financial expenses, net |
|
235 |
|
|
|
353 |
|
|
|
481 |
|
|
|
771 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
(2,787 |
) |
|
|
(4,588 |
) |
|
|
(6,635 |
) |
|
|
(8,581 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxes on income (tax
benefit) |
|
68 |
|
|
|
(1 |
) |
|
|
60 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(2,855 |
) |
|
$ |
(4,587 |
) |
|
$ |
(6,695 |
) |
|
$ |
(8,587 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per ordinary share,
basic and diluted |
$ |
(0.22 |
) |
|
$ |
(0.88 |
) |
|
$ |
(0.57 |
) |
|
$ |
(2.03 |
) |
Weighted average number of
shares used in computing net loss per ordinary share, basic and
diluted |
|
13,101,275 |
|
|
|
5,213,446 |
|
|
|
11,744,275 |
|
|
|
4,236,788 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to
Non-GAAP net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(2,855 |
) |
|
$ |
(4,587 |
) |
|
$ |
(6,695 |
) |
|
$ |
(8,587 |
) |
Non-cash share based
compensation expense |
|
113 |
|
|
|
314 |
|
|
|
312 |
|
|
|
633 |
|
Depreciation of property and
equipment, net |
|
76 |
|
|
|
79 |
|
|
|
151 |
|
|
|
173 |
|
Non-GAAP net loss |
$ |
(2,666 |
) |
|
$ |
(4,194 |
) |
|
$ |
(6,232 |
) |
|
$ |
(7,781 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ReWalk Robotics Ltd. And subsidiaries |
Condensed Consolidated Balance Sheets |
(unaudited) |
(In thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
2020 |
|
|
2019 |
Assets |
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
14,064 |
|
$ |
16,253 |
Trade receivable, net |
|
1,054 |
|
|
794 |
Prepaid expenses and other current assets |
|
1,123 |
|
|
903 |
Inventories |
|
3,455 |
|
|
3,123 |
Total current assets |
|
19,696 |
|
|
21,073 |
Restricted cash and other long
term assets |
|
1,037 |
|
|
1,061 |
Operating lease right-of-use
assets |
|
1,526 |
|
|
1,737 |
Property and equipment,
net |
|
447 |
|
|
501 |
Total assets |
$ |
22,706 |
|
$ |
24,372 |
|
|
|
|
|
|
Liabilities and equity |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Current maturities of long term loans |
$ |
4,548 |
|
$ |
5,438 |
Current maturities of operating leases |
|
620 |
|
|
637 |
Trade payables |
|
2,117 |
|
|
2,698 |
Other current liabilities |
|
1,562 |
|
|
1,395 |
Total current liabilities |
|
8,847 |
|
|
10,168 |
|
|
|
|
|
|
Long term loan, net of current
maturities |
|
218 |
|
|
1,527 |
Noncurrent operating
leases |
|
1,098 |
|
|
1,315 |
Other long-term
liabilities |
|
644 |
|
|
582 |
|
|
|
|
|
|
Shareholders’ equity |
|
11,899 |
|
|
10,780 |
Total liabilities and
equity |
$ |
22,706 |
|
$ |
24,372 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ReWalk Robotics Ltd. And subsidiaries |
Condensed Consolidated Statements of Cash
Flows |
(unaudited) |
(In thousands) |
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
June 30, |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
Net cash used in operating activities |
$ |
(7,533 |
) |
|
$ |
(7,956 |
) |
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
(15 |
) |
|
|
- |
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
5,303 |
|
|
|
22,473 |
|
Increase (decrease) in cash, cash equivalents, and restricted
cash |
|
(2,245 |
) |
|
|
14,517 |
|
Cash, cash equivalents, and restricted cash at beginning of
period |
|
16,992 |
|
|
|
10,347 |
|
|
|
|
|
|
|
|
|
Cash, cash equivalents, and restricted cash at end of period |
$ |
14,747 |
|
|
$ |
24,864 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ReWalk Robotics Ltd. And subsidiaries |
(unaudited) |
(In thousands, except units placed) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
(Unaudited) |
|
(Unaudited) |
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Israel |
$ |
- |
|
$ |
2 |
|
$ |
- |
|
$ |
2 |
United States |
|
631 |
|
|
426 |
|
|
847 |
|
|
923 |
Europe |
|
1,035 |
|
|
418 |
|
|
1,577 |
|
|
1,497 |
Asia Pacific |
|
2 |
|
|
31 |
|
|
4 |
|
|
36 |
Total Revenue |
$ |
1,668 |
|
$ |
877 |
|
$ |
2,428 |
|
$ |
2,458 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Personal units revenue |
$ |
1,667 |
|
$ |
851 |
|
$ |
2,381 |
|
$ |
2,397 |
Rehabilitation units revenue |
|
1 |
|
|
26 |
|
|
47 |
|
|
61 |
Total Revenue |
$ |
1,668 |
|
$ |
877 |
|
$ |
2,428 |
|
$ |
2,458 |
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