CHF Solutions, Inc. Announces 53 Percent Increase in Revenues for Second Quarter 2019 Over Previous Year and 38 Percent Incre...
August 06 2019 - 8:00AM
CHF Solutions, Inc. (Nasdaq: CHFS), a medical device company
focused on developing, manufacturing and commercializing a
clinically proven alternative to diuretics for the treatment of
fluid overload, announced today its results for the second
quarter ended June 30, 2019, which included the following
highlights:
- Revenue for second quarter ended June 30, 2019 was $1.7
million, an increase of 53 percent compared to the same period of
the prior year, and 38% sequentially from Q1 2019. Gross margin
percentages increased to 50 percent from 21 percent during the same
period a year ago, after transition to in-house manufactured
inventory.
- Opened 7 new hospitals and hospital systems. In Q3 expect to
open more than 10 new accounts including several new hospital
systems.
- Increased field education specialists from 5 to 14 to support
new account launches and rapid growth.
- Continued progress towards obtaining regulatory clearance for
an expanded label in pediatrics. Pre-submission meeting with the
FDA held in May 2019; submission expected in Q3 2019 and clearance
in Q4 2019.
- Working with a large hospital system in New York on a 700
patient retrospective study to evaluate the clinical impact of
utilizing the Aquadex FlexFlow® system on post-surgery patients,
and with a large hospital in Philadelphia on a 344 patient
retrospective study to evaluate the impact of ultrafiltration on
fluid removal, renal outcomes, and readmission rates.
“We continue to deliver impressive double-digit increase in our
revenue, 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 June 30, |
Six months endedJune 30, |
|
|
2019 |
|
2018 |
|
|
2019 |
2018 |
|
Net sales |
$ |
1,677 |
|
$ |
1,099 |
|
$ |
2,892 |
|
$ |
2,136 |
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
835 |
|
|
870 |
|
|
1,447 |
|
|
1,771 |
|
Selling, general and
administrative |
|
3,973 |
|
|
3,765 |
|
|
7,991 |
|
|
7,776 |
|
Research and
development |
|
1,297 |
|
|
643 |
|
|
2,607 |
|
|
1,122 |
|
Total costs and expenses |
|
6,105 |
|
|
5,278 |
|
|
12,045 |
|
|
10,669 |
|
Loss from operations |
|
(4,428 |
) |
|
(4,179 |
) |
|
(9,153 |
) |
|
(8,533 |
) |
Loss before income taxes |
|
(4,428 |
) |
|
(4,179 |
) |
|
(9,153 |
) |
|
(8,533 |
) |
Income tax expense |
|
(2 |
) |
|
(2 |
) |
|
(4 |
) |
|
(2 |
) |
Net loss |
$ |
(4,430 |
) |
$ |
(4,181 |
) |
$ |
(9,157 |
) |
$ |
(8,535 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss
per share |
$ |
(1.93 |
) |
$ |
(13.03 |
) |
$ |
(8.82 |
) |
$ |
(28.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding – basic and diluted |
|
2,295 |
|
|
321 |
|
|
1,550 |
|
|
304 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss: |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments |
$ |
(3 |
) |
$ |
(2 |
) |
$ |
(5 |
) |
$ |
(1 |
) |
Total comprehensive
loss |
$ |
(4,433 |
) |
$ |
(4,183 |
) |
$ |
(9,162 |
) |
$ |
(8,536 |
) |
CHF SOLUTIONS, INC. AND
SUBSIDIARIESCondensed Consolidated Balance
Sheets(In thousands, except share and per share
amounts)
|
|
June 30, 2019 |
|
|
December 31, 2018 |
|
ASSETS |
|
(unaudited) |
|
|
|
|
Current
assets |
|
|
|
|
|
|
Cash and cash
equivalents |
$ |
7,402 |
|
$ |
5,480 |
|
Accounts
receivable |
|
932 |
|
|
786 |
|
Inventory |
|
1,690 |
|
|
1,658 |
|
Other
current assets |
|
278 |
|
|
203 |
|
Total current
assets |
|
10,302 |
|
|
8,127 |
|
Property, plant and
equipment, net |
|
574 |
|
|
536 |
|
Operating lease
right-of-use asset |
|
531 |
|
|
— |
|
Other assets |
|
21 |
|
|
113 |
|
TOTAL
ASSETS |
$ |
11,428 |
|
$ |
8,776 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Accounts payable |
$ |
1,178 |
|
$ |
1,133 |
|
Accrued
compensation |
|
1,186 |
|
|
1,498 |
|
Current portion of
operating lease liability |
|
176 |
|
|
— |
|
Other current
liabilities |
|
97 |
|
|
209 |
|
Total current
liabilities |
|
2,637 |
|
|
2,840 |
|
Operating lease
liability |
|
357 |
|
|
- |
|
Total
liabilities |
|
2,994 |
|
|
2,840 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
— |
|
|
— |
|
|
|
|
|
|
|
|
Stockholders’
equity |
|
|
|
|
|
|
Series A junior participating
preferred stock as of June 30, 2019 and December 31, 2018, par
value $0.0001 per share; authorized 30,000 shares, none
outstanding |
|
— |
|
|
— |
|
Series F convertible preferred
stock as of June 30, 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 June 30, 2019 and December 31, 2018, par value $0.0001
per share; authorized 550,842 and 0 shares, respectively, issued
and outstanding 550,842 and 0, respectively |
|
|
|
|
|
|
Preferred stock as of June 30,
2019 and December 31, 2018, par value$0.0001 per share; authorized
39,418,623 and 39,969,465 shares, none outstanding |
|
— |
|
|
— |
|
Common stock as of June 30,
2019 and December 31, 2018, par value$0.0001 per share; authorized
100,000,000 shares, issued and outstanding2,328,320 and 513,445,
respectively |
|
— |
|
|
— |
|
Additional paid‑in
capital |
|
215,761 |
|
|
204,101 |
|
Accumulated other
comprehensive income: |
|
|
|
|
|
|
Foreign currency
translation adjustment |
|
1,218 |
|
|
1,223 |
|
Accumulated deficit |
|
(208,545 |
) |
|
(199,388 |
) |
Total stockholders’
equity |
|
8,434 |
|
|
5,936 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
$ |
11,428 |
|
$ |
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 |
|
Net loss |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(4,181 |
) |
|
(4,181 |
) |
Foreign currency translation
adjustment |
|
— |
|
|
— |
|
|
— |
|
|
(2 |
) |
|
— |
|
|
(2 |
) |
Stock-based compensation,
net |
|
3 |
|
|
— |
|
|
606 |
|
|
— |
|
|
— |
|
|
606 |
|
Conversion of preferred stock
into common stock |
|
18,127 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Balance June 30,
2018 |
|
321,855 |
|
$ |
— |
|
$ |
198,474 |
|
$ |
1,226 |
|
$ |
(190,891 |
) |
$ |
8,809 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
Net loss |
|
— |
|
— |
|
— |
|
— |
|
(4,430 |
) |
(4,430 |
) |
Foreign currency translation
adjustment |
|
— |
|
— |
|
— |
|
(3 |
) |
— |
|
(3 |
) |
Stock-based compensation,
net |
|
— |
|
— |
|
339 |
|
— |
|
— |
|
339 |
|
Conversion of preferred stock
into common stock |
|
259,300 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
Balance June 30,
2019 |
|
2,328,320 |
|
$ |
— |
|
$ |
215,761 |
|
$ |
1,218 |
|
$ |
(208,545 |
) |
$ |
8,434 |
|
CHF SOLUTIONS, INC. AND
SUBSIDIARIESCondensed Consolidated Statements of
Cash Flows(Unaudited and in thousands)
|
|
Six months endedJune 30, |
|
|
2019 |
|
|
2018 |
|
Operating Activities: |
|
|
|
|
|
|
Net loss |
$ |
(9,157 |
) |
$ |
(8,535 |
) |
Adjustments to reconcile net loss
to cash flows used in operating activities: |
|
|
|
|
|
|
Depreciation and
amortization |
|
120 |
|
|
115 |
|
Stock-based compensation
expense, net |
|
701 |
|
|
1,107 |
|
Changes in operating assets and
liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
(146 |
) |
|
(107 |
) |
Inventory |
|
(32 |
) |
|
(727 |
) |
Other current assets |
|
(75 |
) |
|
(48 |
|
Other assets and
liabilities |
|
(18 |
) |
|
— |
|
Accounts payable and
accrued expenses |
|
(267 |
) |
|
(283 |
) |
Net cash used in
operating activities |
|
(8,874 |
) |
|
(8,478 |
) |
|
|
|
|
|
|
|
Investing
Activities: |
|
|
|
|
|
|
Purchases of property and
equipment |
|
(158 |
) |
|
(121 |
) |
Net cash used in
investing activities |
|
(158 |
) |
|
(121 |
) |
|
|
|
|
|
|
|
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 |
|
(5 |
) |
|
(1 |
) |
Net increase (decrease) in cash
and cash equivalents |
|
1,922 |
|
|
(8,600 |
) |
Cash and cash equivalents -
beginning of period |
|
5,480 |
|
|
15,595 |
|
Cash and cash equivalents
- end of period |
$ |
7,402 |
|
$ |
6,995 |
|
|
|
|
|
|
|
|
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: 6292209 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 developing, manufacturing and commercializing
the Aquadex FlexFlow system for aquapheresis therapy. The Aquadex
FlexFlow system is a clinically proven therapy that provides a
safe, effective and predictable method of removing excess sodium
and fluid from patients suffering from fluid overload. 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 vision is to change the
lives of fluid overloaded patients 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 and add new
accounts in future quarters and the timing of the regulatory
clearance for an expanded label in pediatrics. 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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