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Cue Health Reports First Quarter 2022 Results

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SAN DIEGO, May 11, 2022--(BUSINESS WIRE)--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

View source version on businesswire.com: https://www.businesswire.com/news/home/20220511006049/en/

Contacts

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

Cue Health
press@cuehealth.com

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