CHF Solutions, Inc. Announces 17 Percent Increase in Revenues for First Quarter 2019 Over Previous Year and Provides Company ...
May 07 2019 - 8:00AM
CHF Solutions, Inc. (Nasdaq: CHFS) announced today its results for
the first quarter ended March 31, 2019, which included the
following highlights:
- Revenue for first quarter ended March 31, 2019 was $1.2
million, an increase of 17 percent compared to the same period of
the prior year. Gross margin percentages increased to 50 percent
from 13 percent from the same period a year ago, after transition
to in-house manufactured inventory.
- Continued progress towards obtaining regulatory clearance for
an expanded label in pediatrics. Pre-submission meeting with the
FDA scheduled for May 2019.
- Continued expansion into cardiovascular surgery and announced
the launch of two new accounts with surgery focus.
- Exhibited at three cardiovascular surgery conferences: Society
of Thoracic Surgeons in January 2019, International Conference of
Heart and Lung Transplantation in March 2019, and the American
Association for Thoracic Surgery conference in May 2019. Sponsored
seminar led by renowned cardiothoracic surgeon, Dr. Daniel Beckles,
MD, PhD.
- Announced the publication of an article in the Journal of
Medical Economics, a peer reviewed journal that evaluated the cost
saving benefits of the Aquadex FlexFlow® system in the hospital
setting.
- Closed on an underwritten public offering of stock, for net
proceeds of $11.0 million. Ended quarter with $11.5 million in cash
and no debt.
“We began the year strong with continued double-digit increase
in our revenues over the previous year and we believe we are
well-poised to continue to grow in the quarters to come,” said John
Erb, chairman and CEO of CHF Solutions. “We will continue to
develop and refine our strategic focus toward driving revenue,
which is the key metric our employees, shareholders and potential
investors use to measure performance.”
FINANCIALS
CHF SOLUTIONS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of
Operations and Comprehensive Loss (Unaudited and in
thousands, except per share amounts)
|
|
Three months ended March
31, |
|
|
2019 |
|
|
2018 |
|
Net sales |
$ |
1,215 |
|
$ |
1,037 |
|
Costs and
Expenses: |
|
|
|
|
|
|
Cost of
goods sold |
|
612 |
|
|
901 |
|
Selling,
general and administrative |
|
4,018 |
|
|
4,011 |
|
Research
and development |
|
1,310 |
|
|
479 |
|
Total
costs and expenses |
|
5,940 |
|
|
5,391 |
|
Loss from
operations |
|
(4,725 |
) |
|
(4,354 |
) |
Loss
before income taxes |
|
(4,725 |
) |
|
(4,354 |
) |
Income
tax expense |
|
(2 |
) |
|
— |
|
Net loss |
$ |
(4,727 |
) |
$ |
(4,354 |
) |
|
|
|
|
|
|
|
Basic and
diluted loss per share |
$ |
(11.47 |
) |
$ |
(15.12 |
) |
|
|
|
|
|
|
|
Weighted average shares
outstanding – basic and diluted |
|
805 |
|
|
288 |
|
|
|
|
|
|
|
|
Other
comprehensive income: |
|
|
|
|
|
|
Foreign
currency translation adjustments |
$ |
(2 |
) |
$ |
1 |
|
Total
comprehensive loss |
$ |
(4,729 |
) |
$ |
(4,353 |
) |
CHF SOLUTIONS, INC. AND
SUBSIDIARIESCondensed Consolidated Balance
Sheets(In thousands, except share and per share
amounts)
|
|
March
31, 2019 |
|
|
December
31, 2018 |
|
ASSETS |
|
(unaudited) |
|
|
|
|
Current
assets |
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
11,489 |
|
$ |
5,480 |
|
Accounts
receivable |
|
622 |
|
|
786 |
|
Inventory |
|
1,790 |
|
|
1,658 |
|
Other
current assets |
|
350 |
|
|
203 |
|
Total current
assets |
|
14,251 |
|
|
8,127 |
|
Property,
plant and equipment, net |
|
518 |
|
|
536 |
|
Operating
lease right-of-use asset |
|
574 |
|
|
— |
|
Other
assets |
|
20 |
|
|
113 |
|
TOTAL
ASSETS |
$ |
15,363 |
|
$ |
8,776 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Accounts
payable |
$ |
1,202 |
|
$ |
1,133 |
|
Accrued
compensation |
|
831 |
|
|
1,498 |
|
Current
portion of operating lease liability |
|
171 |
|
|
— |
|
Other
current liabilities |
|
228 |
|
|
209 |
|
Total current
liabilities |
|
2,432 |
|
|
2,840 |
|
Operating
lease liability |
|
403 |
|
|
- |
|
Total
liabilities |
|
2,835 |
|
|
2,840 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
— |
|
|
— |
|
|
|
|
|
|
|
|
Stockholders’
equity |
|
|
|
|
|
|
Series A junior
participating preferred stock as of March 31, 2019 and December 31,
2018, par value $0.0001 per share; authorized 30,000 shares, none
outstanding |
|
— |
|
|
— |
|
Series F convertible
preferred stock as of March 31, 2019 and December 31, 2018, par
value $0.0001 per share; authorized 535 and 535 shares,
respectively, issued and outstanding 535 and 535, respectively |
|
— |
|
|
— |
|
Series G convertible
preferred stock as of March 31, 2019 and December 31, 2018, par
value $0.0001 per share; authorized 810,142 and 0 shares,
respectively, issued and outstanding 810,142 and 0,
respectively |
|
|
|
|
|
|
Preferred stock as of
March 31, 2019 and December 31, 2018, par value$0.0001 per share;
authorized 39,159,323 and 39,969,465 shares, none outstanding |
|
— |
|
|
— |
|
Common stock as of
March 31, 2019 and December 31, 2018, par value$0.0001 per share;
authorized 100,000,000 shares, issued and outstanding2,069,020 and
513,445, respectively |
|
— |
|
|
— |
|
Additional paid‑in
capital |
|
215,422 |
|
|
204,101 |
|
Accumulated other
comprehensive income: |
|
|
|
|
|
|
Foreign
currency translation adjustment |
|
1,221 |
|
|
1,223 |
|
Accumulated
deficit |
|
(204,115 |
) |
|
(199,388 |
) |
Total
stockholders’ equity |
|
12,528 |
|
|
5,936 |
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
15,363 |
|
$ |
8,776 |
|
CHF SOLUTIONS, INC. AND
SUBSIDIARIESCondensed Consolidated Statements of
Stockholders’ Equity(Unaudited, In thousands, except share
amounts)
|
|
Outstanding Shares of Common
Stock |
|
Common Stock |
|
Additional Paid in
Capital |
|
Accumulated Other
Comprehensive Income |
|
Accumulated
Deficit |
|
Stockholders’
Equity |
|
Balance
December 31, 2017 |
|
271,357 |
|
$ |
— |
|
$ |
197,367 |
|
$ |
1,227 |
|
$ |
(182,356 |
) |
$ |
16,238 |
|
Net loss |
|
— |
|
— |
|
— |
|
— |
|
(4,354 |
) |
(4,354 |
) |
Foreign currency
translation adjustment |
|
— |
|
— |
|
— |
|
1 |
|
— |
|
1 |
|
Stock-based
compensation and stock awards, net |
|
3 |
|
— |
|
501 |
|
— |
|
— |
|
501 |
|
Conversion of preferred
stock into common stock |
|
32,365 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
Balance
March 31, 2018 |
|
303,725 |
|
$ |
— |
|
$ |
197,868 |
|
$ |
1,228 |
|
$ |
(186,710 |
) |
$ |
12,386 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding Shares of Common
Stock |
|
Common Stock |
|
Additional Paid in
Capital |
|
Accumulated Other
Comprehensive Income |
|
Accumulated
Deficit |
|
Stockholders’
Equity |
|
Balance
December 31, 2018 |
|
513,445 |
|
$ |
— |
|
$ |
204,101 |
|
$ |
1,223 |
|
$ |
(199,388 |
) |
$ |
5,936 |
|
Net loss |
|
— |
|
— |
|
— |
|
— |
|
(4,727 |
) |
(4,727 |
) |
Foreign currency
translation adjustment |
|
— |
|
— |
|
— |
|
(2 |
) |
— |
|
(2 |
) |
Stock-based
compensation, net |
|
3 |
|
— |
|
362 |
|
— |
|
— |
|
362 |
|
Issuance of common and
preferred stock, net |
|
455,178 |
|
— |
|
10,959 |
|
— |
|
— |
|
10,959 |
|
Conversion of preferred
stock into common stock |
|
1,100,394 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
Balance
March 31, 2019 |
|
2,069,020 |
|
$ |
— |
|
$ |
215,422 |
|
$ |
1,221 |
|
$ |
(204,115 |
) |
$ |
12,528 |
|
CHF SOLUTIONS, INC. AND
SUBSIDIARIESCondensed Consolidated Statements of
Cash Flows(Unaudited and in thousands)
|
|
|
Three months endedMarch
31, |
|
|
|
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
Operating Activities: |
|
Net loss |
|
$ |
(4,727 |
) |
$ |
(4,354 |
) |
Adjustments to
reconcile net loss to cash flows used in operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
59 |
|
|
54 |
|
Stock-based compensation expense, net |
|
|
362 |
|
|
500 |
|
Changes in operating
assets and liabilities: |
|
|
|
|
|
|
|
Accounts
receivable |
|
|
164 |
|
|
(113 |
) |
Inventory |
|
|
(132 |
) |
|
(937 |
) |
Other
current assets |
|
|
(147 |
) |
|
6 |
|
Other
assets and liabilities |
|
|
112 |
|
|
— |
|
Accounts
payable and accrued expenses |
|
|
(598 |
) |
|
(192 |
) |
Net cash used
in operating activities |
|
|
(4,907 |
) |
|
(5,036 |
) |
|
|
|
|
|
|
|
|
Investing
Activities: |
|
|
|
|
|
|
|
Purchases
of property and equipment |
|
|
(41 |
) |
|
(57 |
) |
Net cash used
in investing activities |
|
|
(41 |
) |
|
(57 |
) |
|
|
|
|
|
|
|
|
Financing
Activities: |
|
|
|
|
|
|
|
Net
proceeds from public stock offering, net |
|
|
10,959 |
|
|
— |
|
Net cash
provided by financing activities |
|
|
10,959 |
|
|
— |
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash |
|
|
(2 |
) |
|
2 |
|
Net increase (decrease)
in cash and cash equivalents |
|
|
6,009 |
|
|
(5,091 |
) |
Cash and cash
equivalents - beginning of period |
|
|
5,480 |
|
|
15,595 |
|
Cash and cash
equivalents - end of period |
|
$ |
11,489 |
|
$ |
10,504 |
|
|
|
|
|
|
|
|
|
Supplemental
cash flow information |
|
|
|
|
|
|
|
Cash paid
for income taxes |
|
$ |
— |
|
$ |
— |
|
|
|
|
|
|
|
|
|
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 the Investors page of
the CHF Solutions website at http://ir.chf-solutions.com or access
the webcast directly at 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: 7369669. An audio archive of the webcast will
be available following the call on the Investor page 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
mission is to predict, measure, and control patient fluid balance
through science, collaboration, and innovative medical
technology. CHF Solutions is a Delaware corporation
headquartered in Minneapolis, Minnesota 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, statements
regarding the Company’s ability to grow revenue in future quarters.
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 commercialization strategy, the
possibility that we may be unable to raise sufficient funds
necessary for our anticipated operations, our post-market clinical
data collection activities, 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.
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
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