Source: Nuwellis, Inc.
CHF Solutions, Inc. Announces 80% Revenue Growth for its Fourth Quarter and Provides Company Update
EDEN PRAIRIE, Minn., Feb. 20, 2019 (GLOBE NEWSWIRE) -- CHF Solutions, Inc. (Nasdaq: CHFS) announced today its results for the fourth quarter and year ended December 31, 2018, which included the following highlights:
- Revenue for the fourth quarter ended December 31, 2018 increased 80.4 percent compared to the same period in 2017. Revenue growth for the year 2018 was 40.7 percent compared to the year 2017.
- Continued marketing focus into post-cardiovascular surgery and heart failure outpatient clinics.
- Commenced discussions with the FDA to request a label modification to include pediatrics.
- Continued international expansion with announcement of new distributor agreements in India and Brazil.
- Announced the filing of two new patent applications to deepen the company’s intellectual property protection of its Aquadex Flexflow® system.
- Ended the quarter with $5.5 million in cash and cash equivalents and no debt.
“Our fourth quarter and year-end performance reflects the significant work our team accomplished during 2018. We achieved impressive revenue growth and continued to make strides in our commercialization efforts,” said John Erb, chairman and CEO of CHF Solutions. “I look forward to executing on the additional market opportunities we have identified, which we believe will deliver additional growth in 2019 and beyond.”
The Company will host a conference call and webcast at 9:00 AM ET today to discuss its financial results and provide an update on the Company’s performance. To access the live webcast, please visit http://ir.chf-solutions.com/events. Alternatively, you may access the live conference call by dialing (877) 303-9826 (U.S.) or (224) 357-2194 (international) and using conference ID: 4589101. An audio archive of the webcast will be available following the call at http://ir.chf-solutions.com/events.
About CHF Solutions
CHF Solutions, Inc. (NASDAQ:CHFS) is a medical device company focused on commercializing the Aquadex FlexFlow system for aquapheresis therapy. The Aquadex FlexFlow system, is indicated for temporary (up to eight hours) ultrafiltration treatment of patients with fluid overload who have failed diuretic therapy, and extended (longer than 8 hours) ultrafiltration treatment of patients with fluid overload who have failed diuretic therapy and require hospitalization. All treatments must be administered by a healthcare provider, under physician prescription, both of whom having received training in extracorporeal therapies. The company's objective is to improve the quality of life for patients with heart failure and related conditions. CHF Solutions is a Delaware corporation headquartered in Minneapolis with wholly owned subsidiaries in Australia and Ireland. The company has been listed on the NASDAQ Capital Market since February 2012.
Forward-Looking Statements
Certain statements in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, the trends in our revenue, our expansion plans to expand into the post-cardiovascular surgery market, our plans for label expansion of Aquadex FlexFlow and our future growth and developments in 2019 and beyond. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this release, including, without limitation, those risk associated with our ability to execute on our business strategy, the possibility that we may be unable to raise sufficient funds necessary for our anticipated operations, benefits of our products to patients, our expectations with respect to product development and commercialization efforts, our ability to increase market and physician acceptance of our products, potentially competitive product offerings, intellectual property protection, our ability to integrate acquired businesses, our expectations regarding anticipated synergies with and benefits from acquired businesses, and other risks and uncertainties described in our filings with the SEC. Forward-looking statements speak only as of the date when made. CHF Solutions does not assume any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
FINANCIALS
CHF SOLUTIONS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except per share amounts)
| Three months ended December 31 | Twelve months ended December 31, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Net sales | $ | 1,499 | $ | 831 | $ | 4,998 | $ | 3,553 | |||||||
| Costs and Expenses: | |||||||||||||||
| Cost of goods sold | 984 | 851 | 3,670 | 2,763 | |||||||||||
| Selling, general and administrative | 3,822 | 2,692 | 15,311 | 10,170 | |||||||||||
| Research and development | 946 | 479 | 3,053 | 1,481 | |||||||||||
| Goodwill and intangibles impairment | — | 3,951 | — | 3,951 | |||||||||||
| Total costs and expenses | 5,752 | 7,973 | 22,034 | 18,365 | |||||||||||
| Loss from operations | (4,253 | ) | (7,142 | ) | (17,036 | ) | (14,812 | ) | |||||||
| Other income (expense): | |||||||||||||||
| Other income, net | — | — | 10 | 28 | |||||||||||
| Warrant valuation expense | — | — | — | (67 | ) | ||||||||||
| Change in fair value of warrant liability | — | 5 | — | 1,475 | |||||||||||
| Total other income | — | 5 | 10 | 1,436 | |||||||||||
| Loss before income taxes | (4,253 | ) | (7,137 | ) | (17,026 | ) | (13,376 | ) | |||||||
| Income tax expense | (3 | ) | — | (6 | ) | (6 | ) | ||||||||
| Net loss | $ | (4,256 | ) | $ | (7,137 | ) | $ | (17,032 | ) | $ | (13,382 | ) | |||
| Basic and diluted loss per share | $ | (8.37 | ) | $ | (140.07 | ) | $ | (42.14 | ) | $ | (525.01 | ) | |||
| Weighted average shares outstanding – basic and diluted | 509 | 113 | 404 | 48 | |||||||||||
| Other comprehensive loss: | |||||||||||||||
| Foreign currency translation adjustment | $ | (2 | ) | $ | (1 | ) | $ | (4 | ) | $ | (8 | ) | |||
| Total comprehensive loss | $ | (4,258 | ) | $ | (7,138 | ) | $ | (17,036 | ) | $ | (13,390 | ) | |||
CHF SOLUTIONS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
| December 31, 2018 | December 31, 2017 | |||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | $ | 5,480 | $ | 15,595 | ||||||||
| Accounts receivable | 786 | 545 | ||||||||||
| Inventories | 1,658 | 1,588 | ||||||||||
| Other current assets | 203 | 136 | ||||||||||
| Total current assets | 8,127 | 17,864 | ||||||||||
| Property, plant and equipment, net | 536 | 570 | ||||||||||
| Other assets | 113 | 21 | ||||||||||
| TOTAL ASSETS | $ | 8,776 | $ | 18,455 | ||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
| Current liabilities | ||||||||||||
| Accounts payable | $ | 1,133 | $ | 862 | ||||||||
| Accrued compensation | 1,498 | 1,021 | ||||||||||
| Other current liabilities | 209 | 208 | ||||||||||
| Total current liabilities | 2,840 | 2,091 | ||||||||||
| Other liabilities | — | 126 | ||||||||||
| Total liabilities | 2,840 | 2,217 | ||||||||||
| Commitments and contingencies | ||||||||||||
| Stockholders’ equity | ||||||||||||
| Series A junior participating preferred stock as of December 31, 2018 and December 31, 2017, par value $0.0001 per share; authorized 30,000 shares, none outstanding | — | — | ||||||||||
| Series F convertible preferred stock as of December 31, 2018 and December 31, 2017, par value $0.0001 per share; authorized 535 and 3,780 shares, respectively, issued and outstanding 535 and 3,780, respectively | ||||||||||||
| Preferred stock as of December 31, 2018 and December 31, 2017, par value $0.0001 per share; authorized 39,969,465 and 39,966,220 shares, respectively, none outstanding | — | — | ||||||||||
| Common stock as of December 31, 2018 and December 31, 2017, par value $0.0001 per share; authorized 100,000,000 shares, issued and outstanding 513,445 and 271,357, respectively | — | — | ||||||||||
| Additional paid‑in capital | 204,101 | 197,367 | ||||||||||
| Accumulated other comprehensive income: | ||||||||||||
| Foreign currency translation adjustment | 1,223 | 1,227 | ||||||||||
| Accumulated deficit | (199,388 | ) | (182,356 | ) | ||||||||
| Total stockholders’ equity | 5,936 | 16,238 | ||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 8,776 | $ | 18,455 | ||||||||
CHF SOLUTIONS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)
| For the years ended December 31, | ||||||||
| 2018 | 2017 | |||||||
| Operating Activities | ||||||||
| Net loss | $ | (17,032 | ) | $ | (13,382 | ) | ||
| Adjustments to reconcile net loss to cash flows from operating activities: | ||||||||
| Depreciation and amortization | 232 | 769 | ||||||
| Stock-based compensation expense, net | 2,087 | 499 | ||||||
| Goodwill and intangibles impairment | — | 3,951 | ||||||
| Change in fair value of warrant liability | — | (1,475 | ) | |||||
| Warrant valuation expense | — | 67 | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (241 | ) | (263 | ) | ||||
| Inventories | (70 | ) | (911 | ) | ||||
| Other current assets | (67 | ) | 1 | |||||
| Other assets | (14 | ) | — | |||||
| Accounts payable and accrued expenses | 545 | (1,176 | ) | |||||
| Net cash used in operations | (14,560 | ) | (11,920 | ) | ||||
| Investing activities: | ||||||||
| Purchase of property and equipment | (198 | ) | (259 | ) | ||||
| Net cash used in investing activities | (198 | ) | (259 | ) | ||||
| Financing activities: | ||||||||
| Net proceeds from public stock offerings | 4,647 | 24,281 | ||||||
| Net proceeds from exercise of warrants | — | 1,989 | ||||||
| Net proceeds from the sale of preferred stock, common stock and warrants | — | 184 | ||||||
| Net cash provided by financing activities | 4,647 | 26,454 | ||||||
| Effect of exchange rate changes on cash | (4 | ) | (3 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | (10,115 | ) | 14,272 | |||||
| Cash and cash equivalents—beginning of period | 15,595 | 1,323 | ||||||
| Cash and cash equivalents—end of period | $ | 5,480 | $ | 15,595 | ||||
| Supplemental schedule of non-cash activities | ||||||||
| Financing fees incurred for subsequent equity financing included in other assets and accounts payable | $ | 78 | $ | — | ||||
| Warrants issued as inducement to warrant exercise | $ | — | $ | 509 | ||||
| Conversion of temporary equity to permanent equity | $ | — | $ | 485 | ||||
| Supplemental cash flow information | ||||||||
| Cash paid for income taxes | $ | 2 | $ | 6 | ||||
CONTACTS:
INVESTORS:
Claudia Napal Drayton
Chief Financial Officer
CHF Solutions, Inc.
952-345-4205
ir@chf-solutions.com
-or-
Bret Shapiro
Managing Partner
CORE IR
516-222-2560
brets@coreir.com
www.coreir.com
MEDIA
Jules Abraham
JQA Partners, Inc.
917-885-7378
jabraham@jqapartners.com