Nuwellis, Inc. Announces Second Quarter 2023 Financial Results
August 08 2023 - 8:15AM
Nuwellis, Inc. (Nasdaq: NUWE), a medical technology company
dedicated to transforming the lives of people with fluid overload,
today reported financial results for the second quarter ended June
30, 2023.
- Revenue of $2.1 million for the
second quarter 2023, representing a 14% increase over the prior
quarter and a 6% decrease over the prior-year period.
- Utilization, or the number of
circuits per console, increased 14% over the same period last year,
reflecting an increase in the number of patients treated with the
Aquadex therapy.
- By segment, second quarter 2023
revenue in Heart Failure increased approximately 8% over the same
period last year, while Critical Care and Pediatrics declined
approximately 20% and 5%, respectively. Pediatrics increased 72%
from the first quarter.
- Gross margin rate of 55.3% in the
second quarter 2023, representing a 730-basis point improvement
compared to a gross margin rate of 48% in the same period last
year.
- Entered into a Supply and
Collaboration Agreement with DaVita Inc. to pilot Aquadex
ultrafiltration therapy to treat adult patients with congestive
heart failure and related conditions in select U.S. markets.
- Announced the appointment of Mike
McCormick to the Board of Directors.
- Cash and cash equivalents of
approximately $9 million and no debt as of June 30, 2023.
“We are pleased to report a rebound in our
business in the second quarter, with Pediatrics increasing 72% from
first quarter, steady growth in the number of patients treated with
Aquadex therapy compared to last year, and continued momentum in
Heart Failure, supported by growing awareness of our clinical
evidence,” said Nestor Jaramillo, President and CEO of Nuwellis.
“As we continue to execute on our goal of transforming the lives of
patients suffering from fluid overload, we are excited to
collaborate with DaVita to potentially help accelerate clinical
adoption of our Aquadex ultrafiltration therapy when first-line
medical treatments are ineffective. We are currently in active
planning for and look forward to initiating the pilot program with
DaVita,” concluded Mr. Jaramillo.
Second Quarter 2023 Financial
Results
Revenue for the second quarter of 2023 was $2.1
million, compared to $2.2 million in the prior-year period. Results
in the quarter were driven by an increase of 14% in circuit sales
offset by lower console sales.
Gross margin was 55.3% for the second quarter of 2023, a
730-basis point improvement year over year, primarily due to
favorable product sales mix and a $0.1 million non-cash inventory
write-off related to the discontinuation of a distribution
agreement in the prior-year period.
Selling, general and administrative expenses for
the second quarter of 2023 were $4.7 million, compared to $4.3
million in the prior-year period. The increase was primarily due to
increased professional fees in the current year quarter.
Second quarter research and development expenses
were $1.5 million, compared to $1.1 million in the second quarter
of 2022, reflecting higher spend on the new pediatric CRRT device
as we ramp up the development effort in preparation for the IDE
submission.
Total operating expense of $6.2M was up 15% year
over year and down 11% sequentially; this decrease was primarily
due to a consolidation of sales territories in the quarter aimed at
increasing efficiency.
Net loss for the second quarter of 2023 was $4.8
million, or a loss of $3.65 per share, compared to a net loss of
$4.3 million, or a loss of $40.67 per common share, in the
prior-year period. The decrease in net loss per share is due to the
fact that weighted average shares outstanding for the second
quarter of 2023 were approximately 1.3 million, compared to
weighted average shares outstanding of approximately 105,000 in the
prior-year quarter.
At June 30, 2023, the Company had cash and cash
equivalents of approximately $9 million and no debt, with
approximately 1.9 million common shares outstanding.
Webcast and Conference Call
InformationThe 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 Nuwellis website at https://ir.nuwellis.com. Alternatively, you
may access the live conference call by dialing 1-833-816-1404 (U.S)
or 1-412-317-0497 (international) and using the conference ID:
10180182. An audio archive of the webcast will be available
following the call on the Investors page at
https://ir.nuwellis.com.
About NuwellisNuwellis,
Inc. (Nasdaq: NUWE) is a medical technology company dedicated
to transforming the lives of patients suffering from fluid overload
through science, collaboration, and innovation. The Company is
focused on commercializing the Aquadex SmartFlow® system for
ultrafiltration therapy. Nuwellis is headquartered
in Minneapolis, Minnesota with a wholly owned subsidiary in
Ireland. For more information visit www.nuwellis.com or visit us on
LinkedIn.
About the Aquadex SmartFlow®
System The Aquadex SmartFlow system delivers
clinically proven therapy using a simple, flexible, and smart
method of removing excess fluid from patients suffering from
hypervolemia (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 kg. or more whose fluid overload is
unresponsive to medical management, including diuretics. All
treatments must be administered by a health care provider, within
an outpatient or inpatient clinical setting, under physician
prescription, both having received training in extracorporeal
therapies.
Forward-Looking
StatementsCertain statements in this release may be
considered 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 2023 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 risks 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, and other risks and uncertainties described in our
filings with the SEC. Forward-looking statements speak only as of
the date when made. Nuwellis 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: Vivian CervantesGilmartin Group
ir@nuwellis.com
NUWELLIS, INC. AND SUBSIDIARY |
Condensed Consolidated Balance Sheets |
(In thousands, except share and per share amounts) |
|
|
|
June 30,2023 |
|
|
December 31, 2022 |
|
ASSETS |
|
(unaudited) |
|
|
|
Current
assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
8,896 |
|
$ |
17,737 |
|
Marketable securities |
|
— |
|
|
569 |
|
Accounts receivable |
|
1,176 |
|
|
1,406 |
|
Inventories, net |
|
2,733 |
|
|
2,661 |
|
Other current assets |
|
943 |
|
|
396 |
|
Total current
assets |
|
13,748 |
|
|
22,769 |
|
Property, plant and equipment, net |
|
875 |
|
|
980 |
|
Operating lease right-of-use asset |
|
810 |
|
|
903 |
|
Other assets |
|
120 |
|
|
21 |
|
TOTAL
ASSETS |
$ |
15,553 |
|
$ |
24,673 |
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
Accounts payable and accrued liabilities |
$ |
2,311 |
|
$ |
2,245 |
|
Accrued compensation |
|
1,234 |
|
|
2,161 |
|
Current portion of operating lease liability |
|
206 |
|
|
196 |
|
Current portion of finance lease liability |
|
14 |
|
|
28 |
|
Other current liabilities |
|
60 |
|
|
58 |
|
Total current
liabilities |
|
3,825 |
|
|
4,688 |
|
Common stock warrant liability |
|
— |
|
|
6,868 |
|
Operating lease liability |
|
654 |
|
|
760 |
|
Total
liabilities |
|
4,479 |
|
|
12,316 |
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity |
|
|
|
|
|
Series A junior participating
preferred stock as of June 30, 2023 and December 31, 2022, par
value $0.0001 per share; authorized 30,000 shares, none
outstanding |
|
— |
|
|
— |
|
Series F convertible preferred
stock as of both June 30, 2023 and December 31, 2022, par value
$0.0001 per share; authorized 127 shares, issued and outstanding
127 shares |
|
— |
|
|
— |
|
Series I convertible preferred
stock as of June 30, 2023 and December 31, 2022, par value $0.0001;
authorized 1,049,280, issued and outstanding none and 1,049,280,
respectively Preferred stock as of both June 30, 2023 and December
31, 2022, par value$0.0001 per share; authorized 39,969,873 shares,
none outstanding |
|
— |
|
|
— |
|
Common stock as of June 30, 2023 and December 31, 2022, par
value$0.0001 per share; authorized 100,000,000 shares, issued and
outstanding 1,864,265 and 536,394 shares, respectively |
|
— |
|
|
— |
|
Additional paid-in
capital |
|
289,845 |
|
|
279,736 |
|
Accumulated other
comprehensive income: |
|
|
|
|
|
Foreign currency translation adjustment |
|
(24 |
) |
(18 |
) |
Unrealized gain on marketable securities |
|
— |
|
56 |
|
Accumulated deficit |
|
(278,747 |
) |
|
(267,417 |
) |
Total stockholders’
equity |
|
11,074 |
|
|
12,357 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
$ |
15,553 |
|
$ |
24,673 |
|
|
See notes to the condensed consolidated financial
statements.
NUWELLIS, INC. AND SUBSIDIARY |
Condensed Consolidated Statements of Operations and
Comprehensive Loss |
(Unaudited) |
(In thousands, except per share amounts) |
|
|
|
|
Three months endedJune 30, |
Six months endedJune 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net sales |
$ |
2,075 |
|
$ |
2,213 |
|
$ |
3,901 |
|
$ |
4,139 |
|
Cost of goods sold |
|
928 |
|
|
1,150 |
|
|
1,687 |
|
|
1,974 |
|
Gross profit |
|
1,147 |
|
|
1,063 |
|
|
2,214 |
|
|
2,165 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
4,664 |
|
|
4,257 |
|
|
10,154 |
|
|
8,669 |
|
Research and development |
|
1,505 |
|
|
1,107 |
|
|
2,933 |
|
|
2,213 |
|
Total operating expenses |
|
6,169 |
|
|
5,364 |
|
|
13,087 |
|
|
10,882 |
|
Loss from operations |
|
(5,022 |
) |
|
(4,301 |
) |
|
(10,873 |
) |
|
(8,717 |
) |
Other income (expense),
net |
|
179 |
|
|
17 |
|
|
302 |
|
|
(38 |
) |
Change in fair value of
warrant liability |
|
— |
|
|
— |
|
|
(755 |
) |
|
— |
|
Loss before income taxes |
|
(4,843 |
) |
|
(4,284 |
) |
|
(11,326 |
) |
|
(8,755 |
) |
Income tax expense |
|
(2 |
) |
|
(2 |
) |
|
(4 |
) |
|
(4 |
) |
Net loss |
$ |
(4,845 |
) |
$ |
(4,286 |
) |
$ |
(11,330 |
) |
$ |
(8,759 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss
per share |
$ |
(3.65 |
) |
$ |
(40.67 |
) |
$ |
(9.23 |
) |
$ |
(83.12 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding – basic and diluted |
|
1,328 |
|
|
105 |
|
|
1,227 |
|
|
105 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss: |
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
$ |
1 |
|
$ |
1 |
|
$ |
(6 |
) |
$ |
(1 |
) |
Total comprehensive
loss |
$ |
(4,844 |
) |
$ |
(4,285 |
) |
$ |
(11,336 |
) |
$ |
(8,760 |
) |
|
See notes to the condensed consolidated financial
statements.
NUWELLIS, INC. AND SUBSIDIARY |
Condensed Consolidated Statements of Cash
Flows |
(Unaudited) |
(in thousands) |
|
|
|
Six months endedJune 30, |
|
|
2023 |
|
|
|
2022 |
|
Operating Activities: |
|
|
|
|
|
|
Net loss |
$ |
(11,330 |
) |
|
$ |
(8,759 |
) |
Adjustments to
reconcile net loss to cash flows used in operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
169 |
|
|
|
206 |
|
Stock-based compensation expense, net |
|
378 |
|
|
|
477 |
|
Change in fair value of warrant liability |
|
755 |
|
|
|
— |
|
Net realized gain on marketable securities |
|
(65 |
) |
|
|
— |
|
Changes in
operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
230 |
|
|
|
(563 |
) |
Inventory, net |
|
(72 |
) |
|
|
(167 |
) |
Other current assets |
|
(547 |
) |
|
|
76 |
|
Other assets and liabilities |
|
(20 |
) |
|
|
(152 |
) |
Accounts payable and accrued expenses |
|
(856 |
) |
|
117 |
|
Net cash
used in operating activities |
|
(11,358 |
) |
|
|
(8,765 |
) |
|
|
|
|
|
|
|
Investing
Activities: |
|
|
|
|
|
|
Proceeds from sale of marketable securities |
|
578 |
|
|
|
— |
|
Additions to intangible assets |
|
(99 |
) |
|
— |
|
Purchases of property and equipment |
|
(64 |
) |
|
|
(81 |
) |
Net cash
provided by (used in) investing activities |
|
415 |
|
|
|
(81 |
) |
|
|
|
|
|
|
|
Financing
Activities: |
|
|
|
|
|
|
Proceeds from ATM stock offerings, net |
|
2,108 |
|
|
|
— |
|
Payments on finance lease liability |
|
— |
|
|
|
(13 |
) |
Net cash
provided by (used in) financing activities |
|
2,108 |
|
|
|
(13 |
) |
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash |
|
(6 |
) |
|
|
(1 |
) |
Net decrease in
cash and cash equivalents |
|
(8,841 |
) |
|
|
(8,860 |
) |
Cash and cash
equivalents - beginning of period |
|
17,737 |
|
|
|
24,205 |
|
Cash and
cash equivalents - end of period |
$ |
8,896 |
|
|
$ |
15,345 |
|
|
See notes to the condensed consolidated financial
statements.
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