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ReWalk Robotics Reports First Quarter 2020 Financial Results

— Q1 2020 Total Revenue of $0.8 million at a reduced level due to COVID-19 pandemic —

— German coverage broadly expanded with social accident and statutory insurance —

            —   Expanding our portfolio by offering two new product lines—

MARLBOROUGH, Mass. BERLIN, Germany and YOKNEAM ILIT, Israel, May 28, 2020 (GLOBE NEWSWIRE) -- ReWalk Robotics Ltd. (RWLK) (“ReWalk” or the “Company”) today announced its financial results for the three months ended March 31, 2020.

Highlights of and subsequent to the first quarter of 2020 include:

  • Total revenue for the first quarter of 2020 was $0.8 million, compared to $1.6 million in the prior year quarter;
  • Finalized agreements with key German payors for the supply of ReWalk Personal 6.0 to qualified patients;
  • Amended our research collaboration agreement with Harvard to focus on tele-health solutions and extend the term through March 2023;
  • Entering upper and lower extremity products, offering hand, leg, arm and balance systems with MediTouch
  • Adding functional electrical stimulation cycle for home and rehab therapy with Myolyn; and
  • CMS code hearing for ReWalk Personal scheduled for June 1, 2020.

“The first quarter of 2020 was challenging as we had the COVID-19 pandemic affecting our ability to meet, train and deliver our products to customers. We have reacted to the new environment and have modified our spending and cash usage to make sure we have sufficient cash to execute our plan for the remaining part of the year and beyond. We are excited with the insurance contracts achieved in Germany, our new product lines added in the United States where we see clear synergy with our current products and our CMS application progress,” stated Larry Jasinski, Chief Executive Officer of ReWalk.

First Quarter 2020 Financial Results

Total revenue was $0.8 million for the first quarter of 2020, compared to $1.6 million during the prior year quarter. We had several ReWalk Personal 6.0 devices that were not delivered due to COVID-19 restrictions.

Gross margin was 49% during the first quarter of 2020, compared to 59% in the first quarter of 2019. The decrease is primarily due to the lower number of units placed during the quarter.

Total operating expenses in the first quarter of 2020 were $4 million, compared to $4.5 million in the prior year period.

Net loss was $3.8 million for the first quarter of 2020, compared to a net loss of $4.0 million in the first quarter of 2019.

Non-GAAP net loss for the first quarter of 2020 and 2019 remained flat and was $3.6 million. Reconciliation of net loss to non-GAAP net loss is included at the end of this press release.

Liquidity

As of March 31, 2020, ReWalk had $16.6 million in cash on its balance sheet and $5.7 million in short- term debt.

Conference Call

ReWalk management will host its first quarter 2020 conference call as follows:

Date Thursday, May 28, 2020
Time 8:30 AM EST
Telephone U.S: (844) 423-9889
  International: (716) 247-5804
  Israel: 18 09 31 53 62
  Germany: 08 00 18 15 287
Access code 5454358
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/fm2cohrh 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 months ended March 31, 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 Gon
Chief 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  
  March 31,  
    2020     2019  
             
     
       
Revenue $ 760   $ 1,581  
Cost of revenues   387     655  
Gross profit   373     926  
             
Operating expenses:            
Research and development, net   985     1,414  
Sales and marketing   1,681     1,587  
General and administrative   1,309     1,500  
Total operating expenses   3,975     4,501  
Operating loss   (3,602)     (3,575)  
Financial expenses, net   246     418  
Loss before income taxes   (3,848)     (3,993)  
Taxes on income (tax benefit)   (8)     7  
Net loss $ (3,840)   $ (4,000)  
Net loss per ordinary share, basic and diluted $ (0.37)   $ (1.25)  
Weighted average number of shares used in computing net loss per ordinary share, basic and diluted   10,374,116     3,211,386  
             
             
Reconciliation of GAAP to Non-GAAP net loss            
Net loss $ (3,840)   $ (4,000)  
Non-cash share based compensation expense   199     319  
Depreciation of property and equipment, net   75     94  
Non-GAAP net loss $ (3,566)   $ (3,587)  
             
             
ReWalk Robotics Ltd. And subsidiaries  
Condensed Consolidated Balance Sheets  
(unaudited)  
(In thousands, except share and per share data)  
             
    March 31,     December 31,  
    2020     2019  
Assets            
Current assets            
Cash and cash equivalents $ 16,602   $ 16,253  
Trade receivable, net   726     794  
Prepaid expenses and other current assets   1,294     903  
Inventories   3,340     3,123  
Total current assets   21,962     21,073  
Restricted cash and other long term assets   1,049     1,061  
Operating lease right-of-use assets   1,721     1,737  
Property and equipment, net   485     501  
Total assets $ 25,217   $ 24,372  
             
Liabilities and equity            
             
Current liabilities            
Current maturities of long term loan $ 5,699   $ 5,438  
Current maturities of operating leases   658     637  
Trade payables   2,789     2,698  
Other current liabilities   1,205     1,395  
Total current liabilities   10,351     10,168  
             
Long term loan, net of current maturities   -     1,527  
Non-current operating leases   1,235     1,315  
Other long-term liabilities   548     582  
Shareholders’ equity   13,083     10,780  
Total liabilities and equity $ 25,217   $ 24,372  
             
             
             
ReWalk Robotics Ltd. And subsidiaries  
Condensed Consolidated Statements of Cash Flows  
(unaudited)  
(In thousands)  
             
  Three Months Ended  
  March 31,  
  2020   2019  
             
Net cash used in operating activities $ (4,341)   $ (4,253)  
Net cash used in investing activities   (9)     -  
Net cash provided by financing activities   4,690     3,580  
Increase (decrease) in cash, cash equivalents, and restricted cash   340     (673)  
Cash, cash equivalents, and restricted cash at beginning of period   16,992     10,347  
Cash, cash equivalents, and restricted cash at end of period $ 17,332   $ 9,674  
             
             
             
ReWalk Robotics Ltd. And subsidiaries  
(unaudited)  
(In thousands, except units placed)  
             
  Three Months Ended  
  March 31,  
  2020   2019  
         
  (Unaudited)  
Revenue:            
United States $ 216   $ 497  
Europe   542     1,079  
Asia Pacific   2     5  
Total Revenue $ 760   $ 1,581  
             
             
             
Revenue:            
Personal units revenue $ 714   $ 1,546  
Rehabilitation units revenue   46     35  
Total Revenue $ 760   $ 1,581