Owlet, Inc. (“Owlet” or the “Company”) (NYSE:OWLT), the pioneer
of smart infant monitoring, today reports financial results for the
first quarter ended March 31, 2024. Owlet’s Chief Executive Officer
and Co-Founder, Kurt Workman, President and Chief Revenue Officer,
Jonathan Harris, and Chief Financial Officer, Kate Scolnick, will
host a conference call to review the Company’s results and provide
a business update today, May 6, 2024, at 4:30 p.m. ET.
Q1 2024 Financial Highlights:
- Q1 Revenue was approximately $14.8 million, up
approximately 37% year over year.
- Q1 Gross Margin was approximately 44.4%, up 570 basis
points year over year.
- Q1 Net Income was approximately $3.3 million, compared
to Net Loss of approximately $11.9 million year over year.
- Q1 adjusted EBITDA loss was approximately $3.1 million,
improving approximately 46% year over year.
“We’ve started off 2024 by delivering solid year over year
growth. Consumer sell-through demand is up 60% year over year for
our Dream Sock and Dream Duo products following FDA clearance, and
the initial feedback on our groundbreaking medical device has been
overwhelmingly positive. Parents are benefiting from the expanded
health information our Dream Sock now provides and this is
translating into higher NPS scores, healthy demand and sell-through
across our consumer channels. In addition, parents are now able to
contact their healthcare providers for prescriptions and seek
support through Owletcare.com with growing reimbursement coverage
from insurance providers which is a bright opportunity in 2024 and
2025.” said Kurt Workman, Owlet’s Chief Executive Officer and
Co-Founder.
Workman continued, “As we’ve surpassed over 2 million infants
monitored on our platform, the unequaled insights from our digital
data capabilities are strengthening. Globally, parents and
caregivers want accessible health insights between hospital and
home and Owlet is uniquely addressing this demand. We believe our
growing market position and operational health are strong momentum
indicators for continued success in 2024.”
Financial Results for the First Quarter Ended March 31,
2024
Revenues for the first quarter of 2024 were approximately $14.8
million compared to revenue in the first quarter of 2023 of
approximately $10.7M. The increase was primarily due to higher
sales of Dream Sock products, reflecting an increase in consumer
demand and sell-through as compared to the same period in the prior
year.
Cost of revenues for the first quarter of 2024 was approximately
$8.2 million with a gross margin of 44.4%. Gross margin increased
year over year primarily due to higher revenue and lower direct
product and fulfillment costs.
Operating expenses, including stock-based compensation, were
approximately $12.3 million for the first quarter of 2024, compared
to approximately $15.1 million for the same period in 2023.
Operating costs decreased year over year primarily due to
transaction costs and lower spend on G&A costs to support the
business.
Operating loss was approximately $5.7 million for the first
quarter of 2024, compared to approximately $11.0 million for the
first quarter of 2023.
Net income was approximately $3.3 million for the first quarter
of 2024, compared to net loss of approximately $11.9 million for
the first quarter of 2023. Net income in the first quarter of 2024
is primarily driven by Owlet demonstrating stronger operating
results year over year and a gain related to the Company’s common
stock warrants outstanding.
A gain of approximately $9.2 million in the first quarter of
2024 resulted from a decrease in the fair value of common stock
warrants outstanding as compared to a gain of approximately $1.9
million in the first quarter of 2023.
Adjusted EBITDA loss was approximately $3.1 million for the
first quarter of 2024, compared to approximately $5.8 million for
the first quarter of 2023.
Basic earnings per share was $0.15 for the first quarter of
2024, compared to basic net loss per share of ($1.54) for the first
quarter of 2023. Diluted net loss per share was ($0.51) for the
first quarter of 2024, compared to diluted net loss per share of
($1.54) for the same period in 2023. Adjusted net loss per share
was ($0.39) for the first quarter of 2024, compared to adjusted net
loss per share of ($1.10) for the same period in 2023.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
(the “Reform Act”). All statements contained in this press release
that do not relate to matters of historical fact should be
considered forward-looking statements, including, without
limitation, statements regarding the Company’s expected financial
performance, outlook based upon regulatory authorizations or
product enhancements, growth prospects, and future operational
efficiencies or results. In some cases, you can identify
forward-looking statements by terms such as “estimate,” “may,”
“believes,” “plans,” “expects,” “anticipates,” “intends,” “goal,”
“potential,” “upcoming,” “outlook,” “guidance,” the negation
thereof, or similar expressions, although not all forward-looking
statements contain these identifying words. Forward-looking
statements are based on the Company’s expectations at the time such
statements are made, speak only as of the dates they are made and
are susceptible to a number of risks, uncertainties and other
factors. For all such forward-looking statements, the Company
claims the protection of the safe harbor for forward-looking
statements contained in the Reform Act. The Company’s actual
results, performance or achievements may differ materially from any
future results, performance or achievements expressed or implied by
our forward-looking statements. Many important factors could affect
the Company’s future results and cause those results to differ
materially from those expressed in or implied by the Company’s
forward-looking statements. Such factors include, but are not
limited to, (i) the regulatory pathway for Owlet’s products,
including submissions to, actions taken by and decisions and
responses from regulators, such as the FDA and similar regulators
outside of the United States, as well as Owlet’s ability to obtain
and maintain regulatory approval or certification for our products
and other regulatory requirements and legal proceedings; (ii)
Owlet’s competition and the Company’s ability to profitably grow
and manage growth; (iii) the Company’s ability to enhance future
operating and financial results or obtain additional financing to
continue as a going concern; (iv) Owlet’s ability to obtain
additional financing in the future, as well risks associated with
the Company’s current loan and debt agreements, including
compliance with debt covenants, restrictions on the Company’s
access to capital, the impact of the Company’s overall debt levels
and the Company’s ability to generate sufficient future cash flows
to meet Owlet’s debt service obligations and operate Owlet’s
business; (v) the ability of Owlet to implement strategic
initiatives, reduce costs, grow revenues, develop and launch new
products, innovate and enhance existing products, meet customer
demands and adapt to changes in consumer preferences and retail
trends; (vi) Owlet’s ability to acquire, defend and protect its
intellectual property and satisfy regulatory requirements,
including but not limited to requirements concerning privacy and
data protection, breaches and loss, as well as other risks
associated with Owlet’s digital platforms and technologies; (vii)
Owlet’s ability to maintain relationships with customers,
manufacturers and suppliers and retain Owlet’s management and key
employees; (viii) Owlet’s ability to upgrade and maintain its
information technology systems; (ix) changes in applicable laws or
regulations; (x) the impact of and disruption to Owlet’s business,
financial condition, operations, supply chain and logistics due to
economic and other conditions beyond the Company’s control, such as
health epidemics or pandemics, macro-economic uncertainties, social
unrest, hostilities, natural disasters or other catastrophic
events; (xi) the possibility that Owlet may be adversely affected
by other economic, business, regulatory, competitive or other
factors, such as changes in discretionary consumer spending and
consumer preferences; and (xii) other risks and uncertainties set
forth in the Company’s other releases, public statements and
filings with the U.S. Securities and Exchange Commission (“SEC”),
including those identified in the “Risk Factors” section of the
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2023, as updated in the Company’s Quarterly Reports on
Form 10-Q for the quarterly periods ended March 31, 2024 and as any
such factors may be updated from time to time in the Company’s
other filings with the SEC. All such forward-looking statements
attributable to the Company or any person acting on the Company’s
behalf are expressly qualified in their entirety by the cautionary
statements contained or referred to above. Moreover, the Company
operates in an evolving environment. Except as required by law, the
Company assumes no obligation to update any forward-looking
statements after the date of this press release, whether because of
new information, future events or otherwise, although Owlet may do
so from time to time. The Company does not endorse any projections
regarding future performance that may be made by third parties.
Disclosure Regarding Non-GAAP Financial Measures
In addition to the financial measures presented in this release
in accordance with U.S. Generally Accepted Accounting Principles
(“GAAP”), the Company has included certain non-GAAP financial
measures in this release, including EBITDA, adjusted EBITDA,
adjusted net loss and adjusted net loss per share.
The Company uses such non-GAAP financial measures as internal
measures of business operating performance and as performance
measures for benchmarking against the Company’s peers and
competitors. The Company believes its presentation of EBITDA,
adjusted EBITDA, adjusted net loss and adjusted net loss per share
provide a meaningful perspective of the underlying operating
performance of the Company’s current business and enables investors
to better understand and evaluate its historical and prospective
operating performance. The Company believes that these non-GAAP
financial measures are important supplemental measures of operating
performance because they exclude items that vary from period to
period without correlation to the Company’s core operating
performance and highlight trends in its business that may not
otherwise be apparent when relying solely on GAAP financial
measures. Due to the nature of the items being excluded, such items
do not reflect future gains, losses, expenses or benefits and are
not indicative of the Company’s future operating performance. The
Company believes investors, analysts and other interested parties
use EBITDA, adjusted EBITDA, adjusted net loss and adjusted net
loss per share in evaluating issuers, and the presentation of these
measures facilitates a comparative assessment of the Company’s
operating performance in addition to the Company’s performance
based on GAAP results.
The Company’s non-GAAP financial measures should not be
considered as an alternative to net loss or net loss per share as a
measure of financial performance or any other performance measure
derived in accordance with GAAP, and should not be construed as an
inference that the Company’s future results will be unaffected by
unusual or non-recurring items.
EBITDA is defined as net loss adjusted for income tax provision
and interest expense, net and depreciation and amortization.
Adjusted EBITDA is defined as net loss adjusted for income tax
provision, interest expense, interest expense from contingent
beneficial conversion feature, interest income, depreciation and
amortization, restructuring costs, warrant liability adjustments,
gain on loan forgiveness, stock-based compensation, and transaction
costs.
Adjusted net loss is defined as net loss adjusted for
restructuring costs, common stock warrant liability adjustments,
stock-based compensation, and transaction costs. Adjusted net loss
per share is defined as adjusted net loss divided by
weighted-average shares of common stock.
EBITDA, adjusted EBITDA, adjusted net loss and adjusted net loss
per share are not recognized terms under GAAP, and the Company’s
presentation of these non-GAAP measures does not replace the
presentation of the Company’s financial results in accordance with
GAAP. Because all companies do not use EBITDA, adjusted EBITDA,
adjusted net loss and adjusted net loss per share (and similarly
titled financial measures) in the same way, those measures as used
by other companies may not be consistent with the way the Company
calculates such measures. The non-GAAP financial measures included
in this release should not be construed as substitutes for or
better indicators of the Company’s performance than the most
directly comparable GAAP financial measures. See the reconciliation
tables that accompany this release for additional information
regarding certain of the non-GAAP financial measures included
herein.
Conference Call and Webcast Information
Owlet will host a conference call and audio webcast today, May
6, 2024, at 4:30 p.m. ET to discuss these results.
To access the conference call by telephone, please dial (833)
470-1428 (domestic) or +1 (404) 975-4839 (international) and
reference Access Code 118135. To listen to the conference call via
live audio webcast, please visit the Events section of Owlet’s
Investor Relations website at investors.owletcare.com.
The archived webcast will also be available on Owlet’s Investor
Relations website mentioned above.
About Owlet, Inc.
Owlet’s digital health infant monitoring platform is
transforming the journey of parenting. The Company (NYSE:OWLT), a
small-cap healthcare growth equity, offers FDA-authorized medical
and consumer pediatric wearables and an integrated HD visual and
audio camera that provide real-time data and insights to parents
who safeguard health, optimize wellness, and ensure peaceful sleep,
for their children.
Since 2012, over 2 million parents worldwide have used Owlet’s
platform contributing to one of the largest collections of consumer
infant health and sleep data. The Company continues to develop
software and digital data solutions to bridge the current
healthcare gap between hospital and home and bring new insights to
parents and caregivers globally. Owlet believes that every child
deserves to live a long, happy, and healthy life. To learn more,
visit www.owletcare.com.
Owlet, Inc. Condensed
Consolidated Balance Sheets - Preliminary, Unaudited1 (in
millions)
Assets
March 31, 2024
December 31, 2023
Current assets:
Cash and cash equivalents
$
18.4
$
16.6
Accounts receivable
11.6
14.0
Inventory
7.7
6.5
Prepaid expenses and other current
assets
2.3
2.9
Total current assets
40.0
39.9
Property and equipment, net
0.3
0.4
Right of use assets, net
0.6
0.9
Intangible assets, net
2.2
2.2
Other assets
0.7
0.7
Total assets
$
43.8
$
44.1
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
16.1
$
13.7
Accrued and other expenses
11.0
15.1
Current portion of deferred revenues
1.1
1.2
Line of credit
7.2
9.3
Current portion of long-term debt
4.0
5.9
Total current liabilities
39.5
45.1
Common stock warrant liability
25.5
27.8
Other long-term liabilities
0.7
0.9
Total liabilities
65.6
73.8
Total mezzanine equity
11.1
7.9
Total stockholders’ equity
(32.9
)
(37.5
)
Total liabilities and stockholders’
equity
$
43.8
$
44.1
Owlet, Inc. Condensed
Consolidated Statements of Cash Flows - Preliminary, Unaudited1
(in millions)
For the Three Months Ended
March 31,
2024
2023
Net cash used in operating activities
(3.3
)
(9.4
)
Net cash used in investing activities
(0.1
)
—
Net cash provided by financing
activities
5.2
22.9
Net change in cash and cash
equivalents
1.8
13.5
1 Amounts may not sum due to rounding
Owlet, Inc. Condensed
Consolidated Statements of Operations and Comprehensive Income
(Loss) - Preliminary, Unaudited1 (in millions, except share and
per share amounts)
Three Months Ended
March 31,
2024
2023
Revenues
$
14.8
$
10.7
Cost of revenues
8.2
6.6
Gross profit
6.5
4.2
Operating expenses:
General and administrative
6.1
8.9
Sales and marketing
3.9
3.4
Research and development
2.3
2.9
Total operating expenses
12.3
15.1
Operating loss
(5.7
)
(11.0
)
Other income (expense):
Interest expense, net
(0.2
)
(2.8
)
Common stock warrant liability
adjustment
9.2
1.9
Other income (expense), net
—
—
Total other income (expense), net
9.0
(0.9
)
Loss before income tax provision
3.3
(11.9
)
Income tax provision
—
—
Net income (loss) and comprehensive
loss
3.3
(11.9
)
Accretion on convertible preferred
stock
(1.3
)
(0.7
)
Net income (loss) allocated to
participating securities
(0.7
)
—
Net income (loss) attributable to common
stockholders
1.3
(12.5
)
Net income (loss) per share attributable
to common stockholders:
Basic
$
0.15
$
(1.54
)
Diluted
$
(0.51
)
$
(1.54
)
Weighted-average shares used in computing
net income (loss) per share:
Basic
8,740,059
8,110,387
Diluted
9,617,825
8,110,387
1 Amounts may not sum due to rounding
Owlet, Inc.
Reconciliation of GAAP to
Non-GAAP Measures - Preliminary, Unaudited1
(in millions)
Three Months Ended
March 31,
2024
2023
Net loss
$
3.3
$
(11.9
)
Income tax provision
—
—
Interest expense, net
0.2
2.8
Depreciation and amortization
0.1
0.3
EBITDA
$
3.5
$
(8.8
)
Common stock warrant liability
adjustment
(9.2
)
(1.9
)
Stock-based compensation
2.2
2.8
Transaction costs
0.3
2.1
Adjusted EBITDA
$
(3.1
)
$
(5.8
)
Three Months Ended
March 31,
2024
2023
Net loss
$
3.3
$
(11.9
)
Non-GAAP adjustments:
Common stock warrant liability
adjustment
(9.2
)
(1.9
)
Stock-based compensation
2.2
2.8
Transaction costs
0.3
2.1
Adjusted net loss
$
(3.4
)
$
(8.9
)
Adjusted net loss per share attributable
to common stockholders
$
(0.39
)
$
(1.10
)
Weighted average number of shares
outstanding
8,740,059
8,110,387
1 Amounts may not sum due to rounding
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240506909699/en/
Investors: Mike Cavanaugh ICR Westwicke Phone:
+1.617.877.9641 mike.cavanaugh@westwicke.com
Media: pr@owletcare.com owlet@diffusionpr.com
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