Cue Health Reports First Quarter 2022 Results

May 11, 2022 at 16:01 PM EDT

Cue Health Inc. (Nasdaq: HLTH), a healthcare technology company, (“Cue") today reported financial results for the first quarter of 2022.

Recent Highlights

Revenue of $179.4 million in the first quarter of 2022, compared to $64.5 million in the first quarter of 2021

235,000+ Cue Readers shipped through the end of the first quarter of 2022, including 72,000+ in the quarter

Cue Covid-19 Test de novo submission to the U.S. Food and Drug Administration (FDA) for full clearance for at-home and point-of-care use

Flu clinical studies nearing completion, with full submission to the FDA expected in the third quarter of 2022

Flu + COVID multiplex starting clinical studies this quarter, ahead of schedule

RSV expected to begin clinical studies in the third quarter of 2022 and Chlamydia + Gonorrhea multiplex in the second half of 2022, as planned

Generated cash of $16.6 million in the first quarter 2022, ending with cash and cash equivalents of $426.5 million

“I am pleased with our first quarter 2022 financial results, including $179 million in revenue, which reflects year-over-year growth of 178%. We made excellent progress on our menu expansion activities, with all of our programs on track or ahead of schedule,” said Ayub Khattak, Co-Founder, Chairman and Chief Executive Officer of Cue Health. “Our recent COVID-19 test de novo submission to the FDA marked a major milestone for the company and we believe it will be the first of many submissions as we seek to address a range of diseases and conditions with our menu of molecular diagnostic tests and future care offerings.”

First Quarter 2022 Financial Results

Revenue was $179.4 million in the first quarter 2022, an increase from $64.5 million in the first quarter 2021. The growth was primarily driven by the continued expansion of our customer base and increases in production capacity.

Private Sector revenue grew to 98.0%, or $175.8 million, in the first quarter 2022.

Public Sector revenue was 2.0%, or $3.6 million, in the first quarter 2022, as we completed shipment of our contract with the U.S. Department of Defense in the fourth quarter 2021.

Disposable test cartridge revenue was $163.2 million in the first quarter 2022.

Product gross margin was 51.1% in the first quarter 2022, compared to 53.4% in the first quarter 2021.

Operating expenses in the first quarter 2022 were $89.9 million, excluding cost of revenues, compared to $19.7 million in the first quarter 2021. The increase was driven by growth in our overall organization, digital marketing spend, and spend related to product development.

Net income was $2.8 million in the first quarter 2022, compared to $13.0 million in the first quarter 2021. Earnings per diluted share was $0.02 in the first quarter 2022, compared to $0.08 in the first quarter 2021.

Cash and cash equivalents were $426.5 million as of March 31, 2022.

Guidance

Cue Health expects second quarter 2022 revenues in the range of $50 million to $55 million.

About Cue Health

Cue Health (Nasdaq: HLTH) 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 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 a prescription and physician supervision. Outside the United States, Cue Health has received the CE mark in the European Union, Interim Order authorization from Health Canada, regulatory approval from India’s Central Drugs Standard Control Organisation, and PSAR authorization from Singapore’s Health Sciences Authority. 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, including statements related to the submission of any FDA applications and expectations around receiving clearance, growth in our customer base, expectations regarding production capacity, potential technology enhancements and future performance and our guidance, including first quarter 2022 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” 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 new Omicron-specific genotyping Cue test, 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, and the factors discussed in the "Risk Factors" section of Cue’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 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.

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)

	Three Months Ended March 31,
		2022			2021
Revenue
Product revenue	$	177,454		$	64,499
Grant and other revenue		1,956			—
Total revenue		179,410			64,499

Operating costs and expenses:
Cost of product revenue		86,697			30,035
Sales and marketing		34,168			430
Research and development		28,787			7,409
General and administrative		26,910			11,870
Total operating costs and expenses		176,562			49,744
Income (loss) from operations		2,848			14,755

Interest expense		(51	)		(535	)
Other income (expense), net		6			37
Net income (loss) before income taxes		2,803			14,257

Income tax expense (benefit)		—			1,226
Net income (loss)	$	2,803		$	13,031
Net income (loss) per share attributable to common stockholders – basic	$	0.02		$	0.09
Weighted-average number of shares used in computation of net income (loss) per share attributable to common stockholders – basic		146,526,370			18,378,777
Net income (loss) per share attributable to common stockholders – diluted	$	0.02		$	0.08
Weighted-average number of shares used in computation of net income (loss) per share attributable to common stockholders – diluted		153,036,804			25,904,338


CONDENSED BALANCE SHEETS
(In thousands, except share amounts and share data)

	March 31, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	426,465		$	409,873
Restricted cash		13,838			13,837
Accounts receivable		75,830			104,589
Inventory		132,567			88,388
Prepaid expenses		42,902			45,889
Other current assets		9,807			7,446
Total current assets		701,409			670,022
Property and Equipment, Net		182,750			177,456
Prepaid rent		480			1,567
Operating lease right-of-use assets		84,212			79,474
Intangible assets, net		9,240			7,673
Other non-current assets		5,679			3,868
Total assets	$	983,770		$	940,060
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	48,842		$	37,208
Accrued liabilities and other current liabilities		39,809			29,498
Income taxes payable		8,246			8,297
Deferred revenue, current		84,629			82,165
Operating lease liabilities, current		7,594			7,147
Finance lease liabilities, current		2,620			2,621
Total current liabilities		191,740			166,936
Deferred revenue, net of current portion		10,283			10,283
Operating leases liabilities, net of current portion		47,626			46,464
Finance lease liabilities, net of current portion		2,627			3,271
Other non-current liabilities		6,356			6,356
Total liabilities		258,632			233,310

Commitments and contingencies (Note 16)

Stockholders’ Equity (Deficit)
Common stock, $0.00001 par value; 500,000,000 and 500,000,000 shares authorized, 146,958,296 and 146,402,991 issued and outstanding at March 31, 2022 and December 31, 2021, respectively		1			1
Additional paid-in-capital		746,352			730,767
Accumulated deficit		(21,215	)		(24,018	)
Total stockholders’ equity (deficit)		725,138			706,750
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)	$	983,770		$	940,060

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Contacts

ICR Westwicke

Caroline Corner

ir@cuehealth.com

(415) 202-5678

Cue Health

press@cuehealth.com