With sales of its exoskeleton slumping nearly 50 percent year-over-year, ReWalk missed its earnings per share target from analysts.
ReWalk Robotics (NASDAQ:RWLK) has had a challenging third quarter.
With low sales volumes and declining revenues, the company hit all-time lows after the release of its Q3 earnings on Wednesday (November 13). ReWalk had sunk over 20 percent to US$2 as of 2:23 p.m. EST.
With a focus on developing robotic exoskeletons that are designed to help individuals with spinal injuries walk, the company showcased how a paralyzed veteran was able to complete the New York Marathon with the exoskeleton during Monday’s (November 11) 26.2 mile race.
This was the first time in history that a paralyzed individual had completed the New York marathon.
In 2014, ReWalk received US Food and Drug Administration clearance for its devices. It has worked with the US Department of Veterans Affairs since 2015 to provide veterans who have had spinal cord injuries with its robotic exoskeletons. The devices have also been used in a number of races worldwide.
The devices, which weigh 50 pounds, consist of battery-powered motors that are located at the hips and knee joints. Sensors are triggered when individual users tilt forward, causing each respective leg to move forward independently.
Despite its exciting news on Monday, ReWalk could not escape the consequences of its slowing sales. Over the quarter, the company sold 17 units, 12 of which were ReWalk Personal exoskeletons. This was a drop of nearly 50 percent compared to the same time last year. The ReWalk Personal costs between US$69,000 and US$85,000.
Still, the company presented operational efficiencies for Q3. Gross profit margins improved to 53 percent, up from 47 percent in the third quarter of 2018. This was paired with growth into new markets.
“Our progress with key German ReWalk contracts and with very positive customer feedback after the first few weeks of ReStore’s clinical use supports our plans to grow this market and our top-line results especially as we look forward into FY 2020,” said ReWalk CEO Larry Jasinski in a press release.
Meanwhile, operating costs declined for the quarter. With a focus on operational stringency, both clinical trial costs and consulting costs were cut. However, ReWalk has yet to achieve profitability.
“We are confident about our strategic approach in creating these new markets and see the path to our longer-term goals of building a breakeven sustainable entity,” said Jasinski.
ReWalk’s earnings per share have missed consensus estimates over the last four consecutive quarters, and Zacks Equity Research anticipates that its earnings per share will reach negative US$0.44 in Q4.
Year-to-date ReWalk’s share price has fallen 54.36 percent, down from US$4.82 in January. Shares of ReWalk reached a 2019 high in June of US$7.49.
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Securities Disclosure: I, Dorothy Neufeld, hold no direct investment interest in any company mentioned in this article.