CHF Solutions, Inc. Announces 80% Revenue Growth for its Fourth Quarter and Provides Company Update
February 20 2019 - 08:30AM
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
SUBSIDIARIESConsolidated Statements of Operations and
Comprehensive Loss (in thousands, except per
share amounts)
|
|
Three months ended December
31 |
Twelve months endedDecember
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
SUBSIDIARIESConsolidated 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 outstanding513,445
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
SUBSIDIARIESConsolidated 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
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