ITMR - Itamar Medical Reports First Quarter 2019 Financial Results

May, 21 2019 06:00 AM Itamar Medical Ltd.

- WatchPAT™ Revenues Increase 15% to $5.8 Million -

- U.S. WatchPAT Revenues Increase 34% to $4.3 Million -

- Total Revenues Increase 11% to $6.1 Million -

CAESAREA, Israel, May 21, 2019 (GLOBE NEWSWIRE) -- Itamar Medical Ltd. (Nasdaq & TASE: ITMR), a company that develops, manufactures and markets non-invasive diagnostic medical devices for sleep apnea with a focus on the cardiology market, today reported unaudited financial results for the first quarter of 2019.

“We are pleased that the investment in our U.S. sales and marketing organization is showing initial results with U.S. WatchPAT revenue growing by 34% in the first quarter of this year,” said Gilad Glick, President and Chief Executive Officer of Itamar Medical. “Cardiologists are seeing the benefits that our WatchPAT technology provides in addressing critical clinical needs at a time when sleep apnea is reaching epidemic proportions. We continue to expand our sales force in order to ensure the highest level of customer support and enhance our ability to further penetrate our target markets – especially the U.S. cardiology market - going forward.”

First Quarter 2019 Highlights and Recent Events

Total revenues for the first quarter of 2019 increased by 10.7% to $6.1 million, compared with $5.5 million for the same quarter last year
WatchPAT revenues for the first quarter of 2019 increased by 14.8% to $5.8 million, compared with $5.1 million for the same quarter last year
U.S. WatchPAT revenues for the first quarter of 2019 increased by 34.2% to $4.3 million, compared with $3.2 million for the same quarter last year
Itamar Medical ADSs commenced trading on Nasdaq under the ticker symbol "ITMR" in February 2019
Launched WatchPAT300, the latest WatchPAT innovation for home sleep apnea testing in April 2019 which improve both performance and cost structure
Signed a data sharing agreement with ResMed Corp. in May 2019 to add their CPAP compliance data to Philips Respironics data to bring the SleePath™ Dashboard to cover the vast majority of the devices in the market

First Quarter 2019 Financial Results

Revenues for the first quarter of 2019 increased by 10.7% to $6.1 million, compared to $5.5 million in the same quarter in 2018. Revenue growth was mainly due to an increase in U.S. WatchPAT sales and offset due to sales seasonality in Japan.

U.S. WatchPAT revenues for the first quarter of 2019 increased by 34.2% to $4.3 million, compared to $3.2 million in the same quarter in 2018. Sales from disposables and renewable products were approximately 65% of WatchPAT revenues in the U.S. in the first quarter of 2019, similar to the first quarter of 2018.

WatchPAT revenues for the first quarter of 2019 increased by 14.8% to $5.8 million, compared to $5.1 million in the same quarter in 2018.

Gross profit for the first quarter of 2019 increased to $4.7 million, compared to $4.2 million in the same quarter in 2018. Gross profit margin for both the first quarter of 2019 and 2018 was approximately 77% of total revenues.

Operating loss for the first quarter of 2019 was $1.3 million, compared to $0.9 million in the same period in 2018. The increase in operating loss was mainly due to an increase of $0.9 million in selling and marketing expenses as a result of an increase in employee-related costs, primarily related to the expansion of the of the U.S. sale team into new geographical territories, partially offset by the increase in revenues.

Non-IFRS operating loss for the first quarter of 2019 was $1.0 million, compared to $0.5 million in the same quarter in 2018. Non-IFRS operating loss excludes approximately $0.3 million in share-based payments; depreciation and amortization of property and equipment and intangible assets; and change in provision for doubtful and bad debt, compared to $0.4 million of similar expenses for the same quarter in 2018 (see “Use of Non-IFRS Measures” below).

Net loss for the first quarter of 2019 was $1.2 million, compared to net income of $0.1 million in the same quarter in 2018.

Non-IFRS net loss for the first quarter of 2019 was $1.2 million, compared to $0.9 million in the same quarter in 2018. Non-IFRS net loss excludes approximately $0.1 million in share-based payments; depreciation and amortization of property and equipment and intangible assets; change in provision for doubtful and bad debt; and gain from reevaluation of derivatives, compared to $1.0 million of similar expenses for the same quarter in 2018 (see “Use of Non-IFRS Measures” below).

As of March 31, 2019, the Company had cash and cash equivalents of $19.9 million. This amount includes the proceeds from the private placement completed in March 2019 of $14.0 million, net of share issuance costs.

Use of Non-IFRS Measures*

In addition to disclosing financial results prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standard Board (IASB), this press release contains Non-IFRS financial measures for operating loss and net loss, which are adjusted from results based on IFRS to exclude: (i) share-based payments; (ii) depreciation and amortization of property and equipment and intangible assets; (iii) change in provision for doubtful and bad debt; and (iv) loss (gain) from reevaluation of derivatives. Management believes that the Non-IFRS financial measures provided in this press release are useful to investors’ understanding and assessment of the Company’s performance. Management uses both IFRS and Non-IFRS measures when operating and evaluating the Company’s business internally and therefore decided to make these Non-IFRS adjustments available to investors. The presentation of this Non-IFRS financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with IFRS. For further details, see a reconciliation of operating loss and net loss on an IFRS basis to a Non-IFRS basis that is provided in the table that accompanies this press release.

About Itamar Medical Ltd.

Itamar Medical is engaged in research, development, sales and marketing of non-invasive medical devices for the diagnosis of respiratory sleep disorders with a focus on the cardiology market. The Company offers a Total Sleep Solution™ to help physicians provide comprehensive sleep apnea management in a variety of clinical environments to optimize patient care and reduce healthcare costs. Its flagship PAT-based product, the WatchPAT™ device, is a home-use diagnostic device for sleep breathing disorders. It also offers the EndoPAT™ system, an FDA-approved device to test endothelial dysfunction and to evaluate the risk of heart disease and other cardiovascular diseases. Itamar Medical is a public company traded on the Nasdaq and on the Tel Aviv Stock Exchanges, and is based in Caesarea, Israel with U.S. headquarters based in Atlanta, GA. For additional information visit www.itamar-medical.com

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and other applicable securities laws. Statements preceded by, followed by, or that otherwise include the words "believes", "expects", "anticipates", "intends", "estimates", "plans", and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical facts. For example, when we discuss our ability to further penetrate our target markets, we are using forward-looking statements. Because such statements deal with future events, they are subject to various risks, uncertainties and assumptions, including events and circumstances out of Itamar Medical's control and actual results, expressed or implied by such forward-looking statements, could differ materially from Itamar Medical's current expectations. Factors that could cause or contribute to such differences include, but are not limited to, risks, uncertainties and assumptions discussed from time to time by Itamar Medical in reports filed with, or furnished to, the U.S. Securities and Exchange Commission (“SEC”) and the Israel Securities Authority (“ISA”), including the Company’s latest Annual Report on Form 20-F which is on file with the SEC and the ISA. Except as otherwise required by law, Itamar Medical undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Company Contact
Itamar Medical Ltd.
Shy Basson
Chief Financial Officer
Phone: +972-4-617-7700
bshy@itamar-medical.com

Investor Relations Contact (U.S.)
Lazar Partners Ltd.
David Carey
Phone: 212-867-1762
dcarey@lazarpartners.com

The contents of any website or hyperlinks mentioned in this press release are for informational purposes and the contents thereof are not part of this press release.

ITAMAR MEDICAL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited)



March 31,

December 31,

2019

2018





U.S. dollars in thousands
Assets







Current assets







Cash and cash equivalents
$
19,887


$
6 ,471

Trade receivables

6,366



6,549

Other receivables

877



1,018

Inventories

2,426



2,235

Total current assets

29,556



16,273









Non-current assets







Long-term restricted deposits and prepaid expenses

385



365

Long-term trade receivables

247



243

Property and equipment

1,243



1,213

Right-of-use assets

1,732



-

Intangible assets

338



298

Total non-current assets

3,945



2,119

Total assets
$
33,501


$
18,392









Liabilities







Current liabilities







Trade payables
$
1,869


$
1,517

Short-term employee benefits

302



222

Current maturities of lease liabilities

765



-

Short-term bank loan

5,000



5,000

Provisions

219



215

Accrued expenses

1,258



1,034

Other accounts payable

2,075



2,063

Total current liabilities

11,488



10,051









Non-current liabilities







Lease liabilities

1,016



-

Derivative instruments

78



442

Long-term employee benefits

169



159

Other long-term liabilities

1,071



1,052

Total non-current liabilities

2,334



1,653

Total liabilities

13,822



11,704









Commitments















Equity







Ordinary share capital

874



748

Additional paid-in capital

125,338



111,486

Accumulated deficit

(106,533
)


(105,546
)
Total equity

19,679



6,688

Total liabilities and equity
$
33,501


$
18,392

ITAMAR MEDICAL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

Three Months Ended

March 31,

2019

2018





U.S. dollars in thousands (except per share data)








Revenues
$
6,056


$
5,470

Cost of revenues

1,402



1,249

Gross profit

4,654



4,221









Selling and marketing expenses

3,722



2,809

Research and development expenses

940



983

General and administrative expenses

1,287



1,313

Total operating expenses

5,949



5,105

Operating loss

(1,295
)


(884
)



Financial income from cash and investments

92



210

Financial expenses from leases, notes and loans

(298
)


(578
)
Gain from derivatives instruments, net

364



1,400

Financial income, net

158



1,032

Income (loss) before taxes on income

(1,137
)


148

Taxes on income

(27
)


(36
)
Net income (loss)
$
(1,164
)

$
112




Earnings (loss) per share (in U.S. dollars):





Basic
$
(0.00
)

$
0.00

Diluted
$
(0.00
)

$
0.00

ITAMAR MEDICAL LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)


Three Months Ended

March 31,

2019

2018





U.S. dollars in thousands
Cash flows from operating activities


Net income (loss)
$
(1,164
)

$
112

Adjustments for:


Depreciation and amortization

331



115

Share-based payment

176



240

Change in provision for doubtful and bad debt

(13
)


2

Net financial cost

24



389

Gain from reevaluation of derivatives

(364
)


(1,400
)
Decrease (increase) in trade receivables

192



(410
)
Decrease in other accounts receivable

128



30

Increase in inventories

(273
)


(387
)
Increase in trade payables

378



269

Increase (decrease) in other accounts payable and accrued expenses

236



(227
)
Increase in employee benefits

90



79

Increase in provisions

4



2

Income tax expenses

27



36

Taxes paid during the period

(27
)


(4
)
Net interest paid during the period

(8
)


(473
)
Net cash used in operating activities

(263
)


(1,627
)



Cash flows from investing activities


Sale of marketable securities

-



3,109

Purchase of property and equipment, intangible assets and capitalization of development expenditure

(146
)


(27
)
Net cash provided by (used in) investing activities

(146
)


3,082




Cash flow from financing activities


Proceeds from issuance of shares, net of share issuance costs

13,968



-

Short-term bank credit

-



5,000

Principle element of lease payments

(224
)


-

Repayment of convertible notes

-



(9,939
)
Issuance of shares due to the exercise of stock options

11



25

Net cash provided by (used in) financing activities

13,755



(4,914
)
Increase (decrease) in cash and cash equivalents

13,346



(3,459
)
Cash and cash equivalents at beginning of period

6,471



7,643

Effect of exchange rate fluctuations on balances of cash and cash equivalents

70



80

Cash and cash equivalent balance at end of period
$
19,887


$
4,264

Non-cash financing activity- conversion of notes to a loan from related parties
$
-


$
1,076

ITAMAR MEDICAL LTD.
RECONCILIATIONS OF IFRS TO NON-IFRS FINANCIAL MEASURES
(Unaudited)


Three Months Ended

March 31,

2019

2018









U.S. dollars in thousands








IFRS operating loss
$
(1,295
)

$
(884
)
Share-based payment

170



240

Depreciation and amortization of property and equipment and intangible assets

132



115

Change in provision for doubtful and bad debt

(13
)


2

Non-IFRS operating loss
$
(1,006
)

$
(527
)



IFRS net income (loss)
$
(1,164
)

$
112

Share-based payment

176



240

Depreciation and amortization of property and equipment and intangible assets

132



115

Change in provision for doubtful and bad debt

(13
)


2

Gain from reevaluation of derivatives

(364
)


(1,400
)
Non-IFRS net loss
$
(1,233
)

$
(931
)

Company Name:	Itamar Medical Ltd.
Stock Symbol:	ITMR
Market:	NYSE
Website:	itamar-medical.com

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