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press release

Nov. 10, 2021, 4:02 p.m. EST

Cue Health Reports Third Quarter 2021 Financial Results

SAN DIEGO, (BUSINESS WIRE) -- Cue Health Inc. /zigman2/quotes/229642598/composite HLTH -8.08% , a mission-driven healthcare technology company, today reported financial results for the third quarter ended September 30, 2021.

Third Quarter and Recent Highlights

  • Reported record total revenue of $223.7 million for the third quarter of 2021, a 63% increase compared to the second quarter of 2021

  • Increased product gross margin to 60.2%, up from 59.9% in the second quarter of 2021

  • Added over 50 enterprise, healthcare provider and public sector customers during the third quarter, nearly tripling our direct customer base to over 80

  • Completed an initial public offering of 14,375,000 shares, raising $213.9 million in proceeds after underwriting fees

  • Strong balance sheet, ending the quarter with cash and cash equivalents of $446.6 million

“In the last few months, we generated record quarterly revenue while entering the public markets, growing our customer base, readying to launch our direct-to-consumer offering with integrated virtual care and in-app travel proctoring, and expanding our team,” said Ayub Khattak, CEO and co-founder of Cue Health. “We’re confident we’ve laid a solid foundation for long-term value creation at Cue and look forward to delivering on our mission of empowering people to live their healthiest lives through personalized, proactive, and informed healthcare.”

Third Quarter 2021 Financial Results

Revenue was $223.7 million for the third quarter of 2021, compared to $137.4 million for the prior quarter and $4.7 million for the prior year. The increase over the prior quarter was made possible by growth in both the public and private sector.

Public Sector revenue was $129.5 million, compared to $105.0 million for the prior quarter. The increase over the prior quarter was driven by additional deliveries to DOD / HHS under the existing agreement.

Private Sector revenue was $94.2 million, compared to $32.4 million for the prior quarter. The increase over the prior quarter was driven by significant additions to the enterprise and provider customer base.

Disposable test cartridge revenue was $179.0 million for the third quarter of 2021, up 74% from the prior quarter.

Product gross margin was 60.2% for the third quarter of 2021, up from 59.9% in the prior quarter due to the increase in production partially offset by higher labor and material costs.

Operating expenses for the third quarter of 2021 were $47.7 million, compared to $17.6 million for the third quarter of 2021. The increase was driven by growth in our overall organization including Sales and Marketing, R&D, and G&A and includes a one-time equity expense of $12.9 million.

Net income was $19.3 million for the third quarter of 2021 compared to $19.8 million in the second quarter. Earnings per diluted share was $0.13 for the third quarter of 2021 compared to $0.14 in the second quarter.

Cash and cash equivalents were $446.6 million as of September 30, 2021.

Guidance

Cue Health expects full year 2021 revenues in the range of $580.0 million to $590.0 million.

About Cue Health

Cue Health /zigman2/quotes/229642598/composite HLTH -8.08% is a mission-driven healthcare technology company that puts consumers in control of their health information and places diagnostic information at the center of care. Cue Health 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 Health’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 physician supervision. Outside the United States, Cue Health has received the CE mark in the European Union, Interim Order authorization from Health Canada, and regulatory approval from India’s Central Drugs Standard Control Organisation. Cue Health was founded in 2010 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, as well as any other statements regarding matters that are not historical facts, may constitute “forward-looking statements”. The words, without limitation, “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” 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 the expected capabilities of the Cue Health Platform, the benefits that may be realized from Cue Health’s collaboration with Google Cloud, our ability to maintain customer growth rates, our ability to increase our private sector revenue, and the factors discussed in the “Risk Factors” section of the prospectus dated September 23, 2021 filed by Cue Health 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.

This product has not been FDA cleared or approved; but has been authorized by FDA under an Emergency Use Authorization, or EUA. This product has been authorized only for the detection of nucleic acid from SARS-CoV-2, 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 COVID-19 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.

CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except share data)
(Unaudited)
 
Three Months Ended Nine Months Ended
September 30, September 30,
  2021 2020 2021 2020
Revenue        
Product revenue $ 222,594   $ 2,128   $ 424,516   $ 2,128  
Grant and other revenue   1,085     2,602     1,085     7,562  
Total revenue   223,679     4,730     425,601     9,690  
Operating costs and expenses:        
Cost of product revenue   88,569     2,641     173,746     2,641  
Sales and marketing   5,572     19     7,531     64  
Research and development   9,079     6,878     21,150     26,558  
General and administrative   33,084     3,694     56,336     7,458  
Total operating costs and expenses   136,304     13,232     258,763     36,721  
Income (loss) from operations   87,375     (8,502 )   166,838     (27,031 )
Interest expense   (1,786 )   514     (9,752 )   (274 )
Change in fair value of redeemable convertible preferred stock warrants   243     20     53      
Change in fair value of convertible notes   (36,306 )       (59,560 )    
Loss on extinguishment of debt       (610 )   (1,998 )   (610 )
Other income (expense), net   (80 )   40     (19 )   99  
Net income (loss) before income taxes   49,446     (8,538 )   95,562     (27,816 )
Income tax expense   30,098         43,374      
Net income (loss) $ 19,348   $ (8,538 ) $ 52,188   $ (27,816 )
Net income (loss) per share attributable to common stockholders – basic $ 0.14   $ (0.52 ) $ 0.37   $ (1.72 )
Weighted-average number of shares used in computation of net income (loss) per share attributable to common stockholders – basic   31,554,720     16,556,343     22,997,311     16,126,647  
Net income (loss) per share attributable to common stockholders – diluted $ 0.13   $ (0.52 ) $ 0.35   $ (1.72 )
Weighted-average number of shares used in computation of net income (loss) per share attributable to common stockholders – diluted   39,304,978     16,556,343     30,747,569   16,126,647
CONDENSED BALANCE SHEETS
(In thousands, except share amounts and share data)
(Unaudited)
     
  September 30, 2021   December 31, 2020
Assets        
Current assets:        
Cash and cash equivalents   $ 446,589   $ 121,578
Restricted cash     12,000     6,000
Accounts receivable, net     90,190     4,168
Inventory     70,739     36,842
Prepaid expenses     47,922     13,847
Other current assets     2,088     1,263
Total current assets     669,528     183,698
Restricted cash, non-current         1,677
Property and equipment, net     168,642     103,683
Prepaid rent     161     16,771
Operating lease right-of-use assets     78,555     8,281
Intangible assets, net     3,691     2,038
Other non-current assets     1,407     180
Total assets   $ 921,984   $ 316,328
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)      
     
Current liabilities:    
Accounts payable   $              35,148   $            23,847
Accrued liabilities and other current liabilities     26,212     8,822
Income taxes payable     37,365    
Deferred revenue, current     76,341     115,747
Debt, current         5,434
Operating lease liabilities, current     3,960     797
Finance lease liabilities, current     2,603     1,249
Total current liabilities     181,629     155,896
Redeemable convertible preferred stock warrant liabilities         1,331
Deferred revenue, net of current portion     31,225     67,349
Operating leases liabilities, net of current portion     50,027     10,472
Finance lease liabilities, net of current portion     3,841     1,857
Other non-current liabilities     884     4,500
Total liabilities     267,606     241,405
Commitments and contingencies            
Total redeemable convertible preferred stock         176,323
Stockholders’ Equity (Deficit)        
Common stock, $0.00001 par value; 500,000,000 and 129,030,355 shares authorized, 146,362,598 and 27,995,780 issued and outstanding at September 30, 2021 and December 31, 2020, respectively     1    
Additional paid-in-capital     712,625     9,036
Accumulated deficit     (58,248)     (110,436)
Total stockholders’ equity (deficit)     654,378     (101,400)
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)   $ 921,984   $ 316,328

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20211110006317/en/

SOURCE: Cue Health Inc.

ICR Westwicke
Caroline Corner
ir@cuehealth.com
(415) 202-5678

Cue Health
press@cuehealth.com

COMTEX_396684824/2456/2021-11-10T16:01:38

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/zigman2/quotes/229642598/composite
US : U.S.: Nasdaq
$ 8.37
-0.74 -8.08%
Volume: 1.08M
Jan. 21, 2022 4:00p
P/E Ratio
74.45
Dividend Yield
N/A
Market Cap
$1.22 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/229642598/composite
US : U.S.: Nasdaq
$ 8.37
-0.74 -8.08%
Volume: 1.08M
Jan. 21, 2022 4:00p
P/E Ratio
74.45
Dividend Yield
N/A
Market Cap
$1.22 billion
Rev. per Employee
N/A
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