Cue Health Inc. ("Cue" or the “Company”) (Nasdaq: HLTH), a
healthcare technology company, today reported financial results for
the fourth quarter and full-year 2023.
Recent Highlights
- Reported fourth quarter total revenue of $18.8 million.
Full-year 2023 total revenue was $70.9 million
- Submitted additional clinical samples and stability data for
RSV to the FDA in support of de novo submission
- Submitted additional clinical samples and gathering additional
stability data for Flu A/B to the FDA in support of de novo
submission
- In late stage development of Herpes + Mpox Multiplex Molecular
Test with plan to submit for EUA in 2Q24
- Executed cost reduction plans, resulting in cash savings of
approximately $200 million on an annualized basis, while
prioritizing near-term revenue generating opportunities
- Reported cash and cash equivalents of $80.9 million as of
December 31, 2023
“We made progress executing on our strategic priorities in 2023.
We obtained two FDA authorizations including a de novo approval for
our COVID-19 Molecular Test and an EUA for our Mpox Molecular Test,
and made two de novo submissions for our RSV and Flu standalone
molecular tests. We also drove significant development progress on
our all-in-one Flu + COVID-19 + RSV test, our Herpes + Mpox
multiplex test, and we expanded our Integrated Care Platform with a
new suite of at-home diagnostics tests and treatments, all while
streamlining our cost structure,” said Ayub Khattak, Chairman and
CEO of Cue. “We believe that these successes have positioned us
well for 2024.”
Fourth Quarter 2023 Financial Results
Revenue was $18.8 million for the fourth quarter of 2023.
Private sector revenue was $17.0 million or 91% of total revenue
with strong ordering from existing customers. Public sector revenue
was $1.8 million and disposable test cartridge revenue was $15.5
million.
GAAP product gross profit was a loss of $18.4 million in the
fourth quarter of 2023. Adjusted product gross profit was a loss of
$2.7 million after excluding one-time $15.7 million inventory
charges.
GAAP operating costs and expenses in the fourth quarter of 2023
were $132.0 million, excluding cost of product revenue. GAAP
operating costs and expenses includes $83.6 million of impairment
of long-lived assets. Adjusted operating costs and expenses were
$48.3 million in the fourth quarter of 2023, a 49% decrease from
$94.6 million in the fourth quarter of 2022.
GAAP net loss in the fourth quarter of 2023 was $148.4 million
and earnings per diluted share was a loss of $0.96. Cue's adjusted
net loss, which excludes the one-time inventory and impairment
charges, was $49.1 million and adjusted earnings per diluted share
was a loss of $0.32. Adjusted EBITDA was a loss of $24.4
million.
Full-Year 2023 Financial Results
Revenue was $70.9 million for the full year of 2023. Private
sector revenue was $63.0 million, or 89% of total revenue. Public
sector revenue was 11% of total revenue or $7.9 million. Disposable
test cartridge revenue was $58.5 million for the full year
2023.
GAAP product gross profit was a loss of $62.9 million for the
full year 2023. Adjusted product gross profit was a loss of $35.2
million after excluding a $12.0 million disputed vendor payment and
the one-time inventory charges of $15.7 million.
GAAP operating costs and expenses for the full year 2023 were
$338.7 million, excluding cost of product revenue. GAAP operating
costs and expenses includes $83.6 million of impairment of
long-lived assets and $14.5 million of restructuring expense.
Adjusted operating costs and expenses for the full year 2023 were
$240.6 million.
GAAP net loss for the full year 2023 was $373.5 million and
earnings per diluted share was a loss of $2.44. Cue's Adjusted net
loss was $267.2 million and adjusted earnings per diluted share was
a loss of $1.75. Adjusted EBITDA was a loss of $163.8 million.
Cash and cash equivalents were $80.9 million as of December 31,
2023 and Cue continues to operate with no debt obligations.
Guidance
Cue expects first quarter 2024 revenues in the range of $9
million to $11 million.
Webcast and Conference Call Information
Cue will host a conference call to discuss the fourth quarter
and full year 2023 financial results, after market close on
Wednesday, March 13, 2024, at 1:30 p.m. Pacific Time / 4:30 p.m.
Eastern Time.
To access the live call via telephone, please register in
advance using the link here. Upon registering, each participant
will receive an email confirmation with dial-in numbers and a
unique personal PIN that can be used to join the call.
The live webinar may be accessed by visiting the “Events”
section of the Company’s website at investors.cuehealth.com. A
replay of the webinar will be available on the Company’s website
shortly after the conclusion of the call.
About Cue
Cue Health Inc. (Nasdaq: HLTH) is a healthcare technology
company that uses diagnostic-enabled care to empower people to live
their healthiest lives. Cue’s platform offers individuals and
healthcare providers convenient and personalized access to
lab-quality diagnostic tests at home and at the point-of-care, as
well as on-demand telehealth consultations and treatment options
for a wide range of health and wellness needs. Cue’s customers
include federal and state public sector agencies and the private
sector, which includes healthcare providers, enterprises, and
individual consumers. Cue received De Novo authorization from the
U.S. Food and Drug Administration (FDA) for its COVID-19 test,
which became the first home use respiratory test to receive this
FDA approval. Cue also received Emergency Use Authorization from
the FDA for its molecular Mpox test at the point-of-care and, to
expand its test menu, Cue has a number of other submissions under
review by the FDA. Cue, founded in 2010, owns over 100 patents and
is headquartered in San Diego. For more information, please visit
www.cuehealth.com.
Forward-Looking Statements
Statements in this press release about future expectations,
plans and prospects, including statements related to the submission
of any FDA applications and expectations around receiving clearance
and authorization and timing of such clearance, authorization and
submissions, growth in our customer base, expectations regarding
production capacity and product launches, potential technology
enhancements, expectations related to availability of our programs
and testing volumes, the ability to achieve growth in the future,
and future results of operations and performance and our guidance,
including first quarter 2024 guidance, as well as any other
statements regarding matters that are not historical facts, may
constitute “forward-looking statements”. The words, without
limitation, “continue,” “estimate,” “expect,” “intend,” “may,”
“plan,” “potential,” “would,” “develop,” “pave,” “seek,” “offer,”
“grow”, “expand”, “look forward”, “believe,” “design” and similar
expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain these or
similar identifying words. Actual results may differ materially
from those indicated by such forward-looking statements as a result
of various important factors, including those related to
expectations around FDA submissions, applications, authorizations
and timing, the expected capabilities of the flu A/B standalone,
flu A/B + COVID multiplex, RSV test, Strep Throat test, Mpox test
and Chlamydia + Gonorrhea multiplex test, the expansion of Cue
Care, our ability to maintain customer growth rates, our ability to
increase private sector revenue, our ability maintain or replace
the revenue historically generated from our government contracts,
our ability to effectively scale our manufacturing capacity to meet
contractual obligations with our customers and market demand, our
ability to realize operating expense annualized savings as a result
of the previously announced cost reduction program, and the factors
discussed in the "Risk Factors" section of Cue’s Annual Report on
Form 10-K for the year ended December 31, 2023, to be filed with
the SEC. Any forward-looking statements contained in this press
release are based on the current expectations of Cue’s management
team and speak only as of the date hereof, and Cue specifically
disclaims any obligation to update any forward-looking statement,
whether as a result of new information, future events or
otherwise.
The Cue Mpox (Monkeypox) Molecular Test has not been FDA cleared
or approved, but has been authorized for emergency use by FDA under
an EUA. This product has been authorized only for the detection of
nucleic acid from monkeypox virus, not for any other viruses or
pathogens. The emergency use of this product is only authorized for
the duration of the declaration that circumstances exist justifying
the authorization of emergency use of in vitro diagnostics for
detection and/or diagnosis of infection with the monkeypox virus,
including in vitro diagnostics that detect and/or diagnose
infection with non-variola Orthopoxvirus, under Section 564(b)(1)
of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §
360bbb-3(b)(1), unless the declaration is terminated or
authorization is revoked sooner.
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 (Loss) Margin, Adjusted Operating Expenses, Adjusted Net
Loss, 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 loss before interest income,
interest expense, income tax expense (benefit), depreciation and
amortization, stock-based compensation, impairment of long-lived
assets, restructuring expense, tax credits, disputed vendor
payment, inventory charges, U.S. Department of Defense (the “DoD”)
deferred revenue release.
Adjusted product gross profit (loss) is defined as product gross
profit (loss), before DoD deferred revenue release, disputed vendor
payment, inventory charges.
Adjusted operating costs and expenses is defined as operating
costs and expenses before cost of product revenue, impairment of
long-lived assets, restructuring expense.
Adjusted net loss is defined as Net loss, before impairment of
long-lived assets, restructuring expense, tax credits, disputed
vendor payment, inventory charges and tax effects.
Adjusted diluted EPS is defined as Diluted EPS before impairment
of long-lived assets, restructuring expense, tax credits, disputed
vendor payment, inventory charges 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.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except share
data)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
Revenue
Product revenue
$
17,381
$
145,701
$
64,223
$
474,166
Grant and other revenue
1,417
1,076
6,713
9,310
Total revenue
18,798
146,777
70,936
483,476
Operating costs and expenses:
Cost of product revenue
35,742
90,783
127,091
329,973
Sales and marketing
6,226
19,312
32,584
88,580
Research and development
32,248
56,149
150,620
171,452
General and administrative
9,866
19,157
57,355
97,103
Impairment of long-lived assets
83,639
—
83,639
—
Restructuring expense
(18
)
—
14,500
2,020
Total operating costs and expenses
167,703
185,401
465,789
689,128
Loss from operations
(148,905
)
(38,624
)
(394,853
)
(205,652
)
Interest income
1,084
1,988
6,240
3,328
Interest expense
(344
)
(232
)
(1,159
)
(645
)
Tax credits
—
—
20,939
—
Other income (expense), net
(207
)
46
162
(835
)
Net loss before income taxes
(148,372
)
(36,821
)
(368,671
)
(203,804
)
Income tax expense (benefit)
60
(5,315
)
4,793
(9,748
)
Net loss
$
(148,432
)
$
(31,506
)
$
(373,464
)
$
(194,056
)
Net loss per share – basic &
diluted
$
(0.96
)
$
(0.21
)
$
(2.44
)
$
(1.31
)
Weighted-average number of shares used in
computation of net loss per share – basic & diluted
154,807,021
149,711,419
152,877,306
148,024,749
CONSOLIDATED BALANCE SHEETS
(In thousands, except share
amounts and share data)
December 31,
2023
December 31,
2022
Assets
Current assets:
Cash and cash equivalents
$
80,889
$
241,530
Restricted cash
800
800
Accounts receivable, net
1,352
18,751
Inventories, net - current
14,039
82,210
Prepaid expenses
8,479
15,728
Other current assets
4,803
12,134
Total current assets
110,362
371,153
Non-current inventories, net
56,273
25,436
Property and equipment, net
72,096
189,275
Operating lease right-of-use assets
78,519
85,321
Intangible assets, net
19,644
16,867
Other non-current assets
2,893
6,528
Total assets
$
339,787
$
694,580
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
7,705
$
7,150
Accrued liabilities and other current
liabilities
29,300
52,378
Deferred revenue, current
162
1,566
Operating lease liabilities, current
5,142
7,739
Finance lease liabilities, current
1,157
2,362
Total current liabilities
43,466
71,195
Operating leases liabilities, net of
current portion
41,640
44,045
Finance lease liabilities, net of current
portion
—
849
Other non-current liabilities
4,429
1,997
Total liabilities
89,535
118,086
Stockholders’ Equity
Common stock
2
1
Additional paid-in-capital
841,788
794,567
Accumulated deficit
(591,538
)
(218,074
)
Total stockholders’ equity
250,252
576,494
Total liabilities and stockholders’
equity
$
339,787
$
694,580
Non-GAAP Measures
(In thousands, except share
data)
The following table presents the
reconciliation of Net loss to Adjusted EBITDA, for the periods
presented:
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
Net loss
$
(148,432
)
$
(31,506
)
$
(373,464
)
$
(194,056
)
Interest income
(1,084
)
(1,988
)
(6,240
)
(3,328
)
Interest expense
344
232
1,159
645
Income tax expense (benefit)
60
(5,315
)
4,793
(9,748
)
Depreciation and amortization
15,219
14,337
56,278
48,972
Stock-based compensation
10,138
15,776
48,735
64,291
Impairment of long-lived assets
83,639
—
83,639
—
Restructuring expense
(18
)
—
14,500
2,020
Tax credits
—
—
(20,939
)
—
Disputed vendor payment
—
—
12,000
—
Inventory charges
15,705
47,352
15,705
92,806
DoD deferred revenue release
—
(92,448
)
—
(92,448
)
Adjusted EBITDA
$
(24,429
)
$
(53,560
)
$
(163,834
)
$
(90,846
)
The following table presents the
reconciliation of Product gross profit (loss) margin to Adjusted
product gross profit (loss) margin, for the periods presented:
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
Product revenue
$
17,381
$
145,701
$
64,223
$
474,166
Cost of product revenue
35,742
90,783
127,091
329,973
Product gross profit (loss)
$
(18,361
)
$
54,918
$
(62,868
)
$
144,193
Product gross profit (loss) margin
(106
)%
38
%
(98
)%
30
%
DoD deferred revenue release
—
(92,448
)
—
(92,448
)
Adjusted product revenue
17,381
53,253
64,223
381,718
Disputed vendor payment
—
—
12,000
—
Inventory charges
15,705
47,352
15,705
92,806
Adjusted product gross profit (loss)
$
(2,656
)
$
9,822
$
(35,163
)
$
144,551
Adjusted product gross profit (loss)
margin
(15
)%
18
%
(55
)%
38
%
The following table presents the
reconciliation of Operating costs and expenses to Adjusted
operating costs and expenses, for the periods presented:
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
Operating costs and expenses
$
167,703
$
185,401
$
465,789
$
689,128
Cost of product revenue
35,742
90,783
127,091
329,973
Operating costs and expenses excluding
cost of product revenue
131,961
94,618
338,698
359,155
Impairment of long-lived assets
83,639
—
83,639
—
Restructuring expense
(18
)
—
14,500
2,020
Adjusted operating costs and expenses
$
48,340
$
94,618
$
240,559
$
357,135
The following table presents the
reconciliation of Net loss / diluted EPS to Adjusted net loss /
diluted EPS, for the periods presented:
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2023
Dollar
Amount
Per Diluted
Share
Dollar
Amount
Per Diluted
Share
Net loss / diluted EPS
$
(148,432
)
$
(0.96
)
$
(373,464
)
$
(2.44
)
Impairment of long-lived assets
83,639
0.54
83,639
0.55
Restructuring expense
(18
)
—
14,500
0.09
Tax credits
—
—
(20,939
)
(0.14
)
Disputed vendor payment
—
—
12,000
0.08
Inventory charges
15,705
0.10
15,705
0.10
Tax effects
40
—
1,364
0.01
Adjusted net loss / diluted EPS
$
(49,066
)
$
(0.32
)
$
(267,195
)
$
(1.75
)
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version on businesswire.com: https://www.businesswire.com/news/home/20240313695867/en/
Press Cue Health press@cuehealth.com
Investors ICR Westwicke Caroline Corner +1-415-202-5678
caroline.corner@westwicke.com
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