CHF Solutions, Inc. Announces Fourth Quarter Financial Results and Provides Company Update
March 03 2020 - 8:00AM
CHF Solutions, Inc. (Nasdaq: CHFS) announced today its results for
the fourth quarter and year ended December 31, 2019, which included
the following highlights:
- Received 510(k) clearance in the U.S. and CE Mark in the EU for
adult and pediatric patients who weigh 20 kg or more and for the
next generation Aquadex console, which will be sold as Aquadex
SmartFlow™.
- Announced expansion of commercial presence in Europe with
distribution arrangement for Germany, Austria and Switzerland.
- Announced presentation of clinical data from an
investigator-initiated analysis at the American Society of Kidney
Week highlighting the efficacy and simplicity of use of Aquadex
FlexFlow in treating patients in critical care settings such as
cardiogenic shock, anasarca, ATN with fluid overload, ESRD with
bridge ultrafiltration between hemodialysis treatment, and
post-operative fluid overload.
- Completed sales force realignment to increase focus on cardiac
surgery and eventually pediatrics. Revenue for fourth quarter ended
December 31, 2019 was $1.4 million, a decrease of 8.8 percent from
Q4 2018. For the year 2019, revenue totaled $5.5 million, a 10
percent increase from 2018.
- Ended the year with $1.3 million in cash and no debt.
Subsequent to quarter end, announced the closing of an underwritten
public offering for net proceeds of approximately $8.6 million, for
total proforma cash balance of $9.9 million.
“I look back at 2019 as a very successful year for
the company,” said John Erb, chairman and CEO of CHF Solutions. “We
made important strides in our commercialization efforts, including
focusing on new market opportunities and driving important product
improvements which we believe will deliver additional growth in
2020 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:
7489468. 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 dedicated to changing the lives of patients
suffering from fluid overload through science, collaboration, and
innovation. The company is focused on developing,
manufacturing, and commercializing the Aquadex SmartFlow system for
ultrafiltration therapy. 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.
About the Aquadex SmartFlow System
The Aquadex SmartFlow system is a clinically proven therapy that
provide a safe, effective, and predictable method of removing
excess fluid from patients suffering from fluid overload. The
Aquadex SmartFlow system is indicated for temporary (up to 8 hours)
or extended (longer than 8 hours in patients who require
hospitalization) use in adult and pediatric patients weighing 20
kilograms or more whose fluid overload is unresponsive to medical
management, including diuretics. All treatments must be
administered by a healthcare provider, within an outpatient or
inpatient clinical setting, under physician prescription, both of
whom having received training in extracorporeal therapies.
Forward-Looking StatementsCertain
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 new
market opportunities and anticipated growth in 2020 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
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.
FINANCIALS
CHF SOLUTIONS, INC. AND
SUBSIDIARIESConsolidated Statements of
Operations and Comprehensive Loss(in thousands,
except per share amounts)
|
Three months ended
December 31 |
Year endedDecember 31, |
|
|
2019 |
|
2018 |
|
|
2019 |
2018 |
|
Net sales |
$ |
1,367 |
|
$ |
1,499 |
|
$ |
5,511 |
|
$ |
4,998 |
|
Costs and
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
673 |
|
|
984 |
|
|
2,660 |
|
|
3,670 |
|
Selling, general and administrative |
|
4,187 |
|
|
3,822 |
|
|
16,285 |
|
|
15,311 |
|
Research and development |
|
953 |
|
|
946 |
|
|
4,672 |
|
|
3,053 |
|
Total costs and expenses |
|
5,813 |
|
|
5,752 |
|
|
23,617 |
|
|
22,034 |
|
Loss from operations |
|
(4,446 |
) |
|
(4,253 |
) |
|
(18,106 |
) |
|
(17,036 |
) |
Other income, net |
|
1 |
|
|
— |
|
|
— |
|
|
10 |
|
Loss before income taxes |
|
(4,445 |
) |
|
(4,253 |
) |
|
(18,106 |
) |
|
(17,026 |
) |
Income tax expense |
|
(3 |
) |
|
(3 |
) |
|
(8 |
) |
|
(6 |
) |
Net loss |
$ |
(4,448 |
) |
$ |
(4,256 |
) |
$ |
(18,114 |
) |
$ |
(17,032 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss
per share |
$ |
(1.12 |
) |
$ |
(8.37 |
) |
$ |
(9.30 |
) |
$ |
(42.14 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding – basic and diluted |
|
3,988 |
|
|
509 |
|
|
2,433 |
|
|
404 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss: |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
$ |
(5 |
) |
$ |
(2 |
) |
$ |
(9 |
) |
$ |
(4 |
) |
Total comprehensive
loss |
$ |
(4,453 |
) |
$ |
(4,258 |
) |
$ |
(18,123 |
) |
$ |
(17,036 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHF SOLUTIONS, INC. AND
SUBSIDIARIESConsolidated Balance
Sheets(in thousands, except share and per share
amounts)
|
|
December 31,2019 |
|
|
December 31, 2018 |
|
ASSETS |
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
1,279 |
|
$ |
5,480 |
|
Accounts receivable |
|
799 |
|
|
786 |
|
Inventories |
|
1,797 |
|
|
1,658 |
|
Other current assets |
|
161 |
|
|
203 |
|
Total current
assets |
|
4,036 |
|
|
8,127 |
|
Property, plant and equipment, net |
|
991 |
|
|
536 |
|
Operating lease right-of-use asset, net |
|
442 |
|
|
— |
|
Other assets |
|
133 |
|
|
113 |
|
TOTAL
ASSETS |
$ |
5,602 |
|
$ |
8,776 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Accounts payable |
$ |
1,488 |
|
$ |
1,133 |
|
Accrued compensation |
|
1,592 |
|
|
1,498 |
|
Current portion of operating lease liability |
|
186 |
|
|
— |
|
Other current liabilities |
|
85 |
|
|
209 |
|
Total current
liabilities |
|
3,351 |
|
|
2,840 |
|
Operating lease liability |
|
261 |
|
|
— |
|
Total
liabilities |
|
3,612 |
|
|
2,840 |
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity |
|
|
|
|
|
|
Series A junior participating
preferred stock as of December 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 both December 31, 2019 and December 31, 2018, par value
$0.0001 per share; authorized 535 shares, issued and outstanding
535 shares |
|
— |
|
|
— |
|
Preferred stock as of both
December 31, 2019 and December 31, 2018, par value $0.0001 per
share; authorized 39,969,465 shares, none outstanding |
|
— |
|
|
— |
|
Common stock as of December
31, 2019 and December 31, 2018, par value$0.0001 per share;
authorized 100,000,000 shares, issued and outstanding4,674,068 and
513,445, respectively |
|
— |
|
|
— |
|
Additional paid‑in
capital |
|
218,278 |
|
|
204,101 |
|
Accumulated other
comprehensive income: |
|
|
|
|
|
|
Foreign currency translation adjustment |
|
1,214 |
|
|
1,223 |
|
Accumulated deficit |
|
(217,502 |
) |
|
(199,388 |
) |
Total stockholders’
equity |
|
1,990 |
|
|
5,936 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
$ |
5,602 |
|
$ |
8,776 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHF SOLUTIONS, INC. AND
SUBSIDIARIESConsolidated Statements of Cash
Flows(in thousands)
|
|
|
For the
years ended December 31, |
|
|
|
2019 |
|
|
2018 |
|
Operating
Activities |
|
|
|
|
|
|
Net loss |
|
$ |
(18,114 |
) |
|
$ |
(17,032 |
) |
Adjustments to reconcile net
loss to cash flows from operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
239 |
|
|
232 |
|
Stock-based compensation expense |
|
1,512 |
|
|
2,087 |
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
(13 |
) |
|
(241 |
) |
Inventories |
|
(343 |
) |
|
(70 |
) |
Other current assets |
|
42 |
|
|
(67 |
) |
Other assets and liabilities |
|
18 |
|
|
(14 |
) |
Accounts payable and accrued expenses |
|
292 |
|
|
545 |
|
Net cash used in
operations |
|
(16,367 |
) |
|
(14,560 |
) |
|
|
|
|
|
|
|
Investing
activities: |
|
|
|
|
|
|
Purchase of property and equipment |
|
(490 |
) |
|
(198 |
) |
Net cash used in
investing activities |
|
(490 |
) |
|
(198 |
) |
|
|
|
|
|
|
|
Financing
activities: |
|
|
|
|
|
|
Net proceeds from public stock offerings, net |
|
12,665 |
|
|
4,647 |
|
Net cash provided by
financing activities |
|
12,665 |
|
|
4,647 |
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash |
|
(9 |
) |
|
(4 |
) |
Net decrease in cash and cash
equivalents |
|
(4,201 |
) |
|
(10,115 |
) |
Cash and cash
equivalents—beginning of year |
|
5,480 |
|
|
15,595 |
|
Cash and cash
equivalents—end of year |
|
$ |
1,279 |
|
|
$ |
5,480 |
|
|
|
|
|
|
|
|
Supplemental schedule
of non-cash activities |
|
|
|
|
|
|
Financing fees incurred for subsequent equity financing included in
other assets and accounts payable |
|
$ |
111 |
|
|
$ |
78 |
|
Inventory transferred to property, plant and equipment |
|
$ |
204 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow
information |
|
|
|
|
|
|
|
|
Cash paid for income taxes |
|
$ |
4 |
|
|
$ |
2 |
|
|
|
|
|
|
|
|
|
|
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
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