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Cue Health Reports Fourth Quarter and Full-Year 2022 Financial Results
March 15, 2023 04:01 PM Eastern Daylight Time
SAN DIEGO--(BUSINESS WIRE)--Cue Health Inc. ("Cue") (Nasdaq: HLTH), a healthcare technology company, today reported financial results for the fourth quarter and full-year 2022.
“Our full year 2022 results reflect the success we’ve seen with our first product and the investments we’ve made to execute on all of our strategic priorities, which position us well to become the category leader in diagnostic testing both in the home and at the point of care”
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Recent and Full-Year 2022 Highlights
Cash and cash equivalents of $241.5 million as of December 31, 2022, while the $100 million secured revolving credit facility remains undrawn and company continues to operate with no debt obligations.
“Our full year 2022 results reflect the success we’ve seen with our first product and the investments we’ve made to execute on all of our strategic priorities, which position us well to become the category leader in diagnostic testing both in the home and at the point of care,” said Ayub Khattak, Chairman and CEO of Cue Health. “From diagnostic testing to virtual care to the procurement of treatment for a range of infectious diseases as well as a growing menu of general health and wellness concerns, Cue has strengthened its integrated care platform to empower people to live their healthiest lives.”
Fourth Quarter 2022 Financial Results
Revenue was $146.8 million for the fourth quarter of 2022, including $92.4 million of deferred revenue recognized in the quarter from our agreement with the U.S. Department of Defense.
Excluding deferred revenue, fourth quarter of 2022 revenue was $54.4 million from ongoing operations, driven by stronger than anticipated COVID-19 testing orders from existing customers.
Private sector revenue was $52.4 million, 36% of total revenue or 96% of revenue from ongoing operations. Public sector revenue was $94.4 million or $1.9 million excluding deferred revenue. Disposable test cartridge revenue was $50.5 million.
GAAP product gross profit margin was 38% in the fourth quarter of 2022. Adjusted product gross profit margin was 18% excluding the impact of deferred revenue and one-time adjustments to inventory reserves related to excess readers and reader components.
Operating expenses in the fourth quarter of 2022 were $94.6 million, excluding cost of revenues, reflecting an increase in research and development spend to support product development, software technology, and menu expansion investments.
GAAP net income in the fourth quarter of 2022 was a loss of $31.5 million and earnings per diluted share was a loss of $0.21. Cue's adjusted net income was a loss of $74.4 million and adjusted earnings per diluted share was a loss of $0.50. Adjusted EBITDA was a loss of $54.0 million.
Full-Year 2022 Financial Results
Revenue was $483.5 million for the full year of 2022 or $391.1 million when excluding deferred revenue.
Private sector revenue was $374.7 million, or 77% of total revenue. Public sector revenue was 23% of total revenue or $108.8 million. Disposable test cartridge revenue was $358.1 million for the full year 2022.
GAAP product gross profit margin was 30% for the full year 2022. Adjusted product gross profit margin was 38% after excluding one-time inventory charges of $92.8 million and the impact from deferred revenue.
Operating expenses for the full year 2022 were $359.2 million including $2.0 million of restructuring expenses taken during the fiscal year.
GAAP net income for the full year 2022 was a loss of $194.1 million and earnings per diluted share was a loss of $1.31. Cue's Adjusted net income was a loss of $191.8 million and Adjusted earnings per diluted share was a loss of $1.29. Adjusted EBITDA was a loss of $91.5 million.
Cash and cash equivalents were $241.5 million as of December 31, 2022. In addition, Cue Health's $100 million secured revolving credit facility remains undrawn and Cue Health operates with no debt obligations.
Guidance
Cue Health expects first quarter 2023 revenues in the range of $20 million to $25 million.
About Cue Health
March 15, 2023 04:01 PM Eastern Daylight Time
SAN DIEGO--(BUSINESS WIRE)--Cue Health Inc. ("Cue") (Nasdaq: HLTH), a healthcare technology company, today reported financial results for the fourth quarter and full-year 2022.
“Our full year 2022 results reflect the success we’ve seen with our first product and the investments we’ve made to execute on all of our strategic priorities, which position us well to become the category leader in diagnostic testing both in the home and at the point of care”
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Recent and Full-Year 2022 Highlights
Reported fourth quarter revenue of $146.8 million, including $92.4 million in deferred revenue related to our agreement with the U.S. Department of Defense. Full-year 2022 revenue was $483.5 million.
Achieved all test menu expansion milestones for 2022 including four molecular diagnostic tests submissions to the U.S. Food and Drug Administration (FDA):
COVID-19 de novo submission for full clearance in the second quarter of 2022
Flu A/B de novo submission in the third quarter of 2022
Flu A/B + COVID multiplex submission for emergency use authorization (EUA) in the third quarter of 2022
Mpox, formerly known as monkeypox, submission for EUA for point-of-care use in the first quarter of 2023
RSV molecular test clinical studies completed in the first quarter of 2023
Chlamydia + Gonorrhea molecular clinical studies began in the fourth quarter of 2022
Strep Throat molecular clinical studies began in the fourth quarter of 2022
Launched Cue CareTM our foundational diagnostic-to-treatment solution, enabling individuals to consult with a healthcare professional and get treatment delivered to their home within hours, if medically indicated.
Introduced a new collection of at-home diagnostic test kits for a variety of health conditions, including sexually transmitted infections, heart health, and food sensitivities, providing personalized care from the convenience and privacy of home. Individuals order tests online, collect samples, mail to a CLIA-certified laboratory partner, and get results delivered to their Cue Health App, with the option to access Cue Care for clinical consultation and prescriptions, if medically indicated.
Executed a cost reduction plan, which is expected to result in cash savings of approximately $100 million on an annualized basis, while prioritizing near-term revenue generating opportunities.
“Our full year 2022 results reflect the success we’ve seen with our first product and the investments we’ve made to execute on all of our strategic priorities, which position us well to become the category leader in diagnostic testing both in the home and at the point of care,” said Ayub Khattak, Chairman and CEO of Cue Health. “From diagnostic testing to virtual care to the procurement of treatment for a range of infectious diseases as well as a growing menu of general health and wellness concerns, Cue has strengthened its integrated care platform to empower people to live their healthiest lives.”
Fourth Quarter 2022 Financial Results
Revenue was $146.8 million for the fourth quarter of 2022, including $92.4 million of deferred revenue recognized in the quarter from our agreement with the U.S. Department of Defense.
Excluding deferred revenue, fourth quarter of 2022 revenue was $54.4 million from ongoing operations, driven by stronger than anticipated COVID-19 testing orders from existing customers.
Private sector revenue was $52.4 million, 36% of total revenue or 96% of revenue from ongoing operations. Public sector revenue was $94.4 million or $1.9 million excluding deferred revenue. Disposable test cartridge revenue was $50.5 million.
GAAP product gross profit margin was 38% in the fourth quarter of 2022. Adjusted product gross profit margin was 18% excluding the impact of deferred revenue and one-time adjustments to inventory reserves related to excess readers and reader components.
Operating expenses in the fourth quarter of 2022 were $94.6 million, excluding cost of revenues, reflecting an increase in research and development spend to support product development, software technology, and menu expansion investments.
GAAP net income in the fourth quarter of 2022 was a loss of $31.5 million and earnings per diluted share was a loss of $0.21. Cue's adjusted net income was a loss of $74.4 million and adjusted earnings per diluted share was a loss of $0.50. Adjusted EBITDA was a loss of $54.0 million.
Full-Year 2022 Financial Results
Revenue was $483.5 million for the full year of 2022 or $391.1 million when excluding deferred revenue.
Private sector revenue was $374.7 million, or 77% of total revenue. Public sector revenue was 23% of total revenue or $108.8 million. Disposable test cartridge revenue was $358.1 million for the full year 2022.
GAAP product gross profit margin was 30% for the full year 2022. Adjusted product gross profit margin was 38% after excluding one-time inventory charges of $92.8 million and the impact from deferred revenue.
Operating expenses for the full year 2022 were $359.2 million including $2.0 million of restructuring expenses taken during the fiscal year.
GAAP net income for the full year 2022 was a loss of $194.1 million and earnings per diluted share was a loss of $1.31. Cue's Adjusted net income was a loss of $191.8 million and Adjusted earnings per diluted share was a loss of $1.29. Adjusted EBITDA was a loss of $91.5 million.
Cash and cash equivalents were $241.5 million as of December 31, 2022. In addition, Cue Health's $100 million secured revolving credit facility remains undrawn and Cue Health operates with no debt obligations.
Guidance
Cue Health expects first quarter 2023 revenues in the range of $20 million to $25 million.
About Cue Health
Cue is a healthcare technology company that makes it easy for individuals to access health information and places diagnostic information at the center of care. Cue enables people to manage their health through real-time, actionable, and connected health information, offering individuals and their healthcare providers easy access to lab-quality diagnostics anywhere, anytime, in a device that fits in the palm of the hand. Cue’s first-of-its-kind COVID-19 test was the first FDA-authorized molecular diagnostic test for at-home and over-the-counter use without a prescription and physician supervision. Outside the United States, Cue has received the CE mark in the European Union, Interim Order authorization from Health Canada, regulatory approval from India's Central Drugs Standard Control Organization, and PSAR authorization from Singapore's Health Sciences Authority. Cue was founded in 2010 and is headquartered in San Diego. For more information, please visit www.cuehealth.com.
Use of Non-GAAP Financial Measures
To supplement our financial information presented in accordance with GAAP, we consider certain financial measures that are not prepared in accordance with GAAP, including Adjusted Product Gross Profit Margin, Adjusted Net (loss) Income, Adjusted Diluted EPS and Adjusted EBITDA (loss). We use these financial measures in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies and to communicate with our board of directors concerning our business and financial performance. We believe that these non-GAAP financial measures provide useful information to investors about our business and financial performance, enhance their overall understanding of our past performance and future prospects, and allow for greater transparency with respect to metrics used by our management in their financial and operational decision making. We are presenting these non-GAAP financial measures to assist investors in seeing our business and financial performance through the eyes of management, and because we believe that these non-GAAP financial measures provide an additional tool for investors to use in comparing results of operations of our business over multiple periods with other companies in our industry.
Adjusted EBITDA is defined as net income before interest expense, income tax expense (benefit), depreciation and amortization, stock-based compensation, restructuring expense, inventory charges – inventory reserves/warranty reserves, DoD deferred revenue release, banking and finance-related items including fair value adjustments - convertible notes.
Adjusted product gross profit is defined as product gross profit, before DoD deferred revenue release and inventory charges – inventory reserves / warranty reserves.
Adjusted net (loss) income is defined as Net (loss) income, before Inventory charges – inventory reserves / warranty reserves, DoD deferred revenue release, restructuring expense and tax effects.
Adjusted diluted EPS is defined as Diluted EPS before Inventory charges – inventory reserves / warranty reserves, DoD deferred revenue release, restructuring expense and tax effects.
Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Further, these metrics have certain limitations in that they do not include the impact of certain expenses that are reflected in our consolidated statements of operations. Thus, these non-GAAP metrics should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP. For reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures see the financial tables below.
To supplement our financial information presented in accordance with GAAP, we consider certain financial measures that are not prepared in accordance with GAAP, including Adjusted Product Gross Profit Margin, Adjusted Net (loss) Income, Adjusted Diluted EPS and Adjusted EBITDA (loss). We use these financial measures in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies and to communicate with our board of directors concerning our business and financial performance. We believe that these non-GAAP financial measures provide useful information to investors about our business and financial performance, enhance their overall understanding of our past performance and future prospects, and allow for greater transparency with respect to metrics used by our management in their financial and operational decision making. We are presenting these non-GAAP financial measures to assist investors in seeing our business and financial performance through the eyes of management, and because we believe that these non-GAAP financial measures provide an additional tool for investors to use in comparing results of operations of our business over multiple periods with other companies in our industry.
Adjusted EBITDA is defined as net income before interest expense, income tax expense (benefit), depreciation and amortization, stock-based compensation, restructuring expense, inventory charges – inventory reserves/warranty reserves, DoD deferred revenue release, banking and finance-related items including fair value adjustments - convertible notes.
Adjusted product gross profit is defined as product gross profit, before DoD deferred revenue release and inventory charges – inventory reserves / warranty reserves.
Adjusted net (loss) income is defined as Net (loss) income, before Inventory charges – inventory reserves / warranty reserves, DoD deferred revenue release, restructuring expense and tax effects.
Adjusted diluted EPS is defined as Diluted EPS before Inventory charges – inventory reserves / warranty reserves, DoD deferred revenue release, restructuring expense and tax effects.
Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Further, these metrics have certain limitations in that they do not include the impact of certain expenses that are reflected in our consolidated statements of operations. Thus, these non-GAAP metrics should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP. For reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures see the financial tables below.