CHF Solutions, Inc. Announces 11.4 Percent Revenue Growth for its Fourth Quarter and Provides Company Update
- Revenue for fourth quarter ended
December 31, 2017 increased 11.4 percent compared to the same period in 2016. Revenue growth for the year 2017 was 12.4 percent compared to the prior year on a pro forma basis. - Continued onboarding of six experienced sales professionals hired in the prior quarter. Subsequent to quarter end, announced the addition of three new field clinical specialists for a total of five who will assist in training and supporting hospital accounts.
- Continued international expansion by signing a distribution agreement with
TransMedic Plc , a southeastAsia distributor. - Meta-analysis on role of ultrafiltration in reducing hospital readmissions published in the
November 2017 issue of peer-reviewed publication Heart Failure Reviews. - Initiated manufacturing consoles and disposables following a successful transition from
Baxter to in-house operations. - Completed an underwritten public offering for net proceeds of
$16.2 million . - Completed annual impairment review of intangible assets and goodwill. Recorded a non-cash write off of
$4.0 million to reflect the difference between fair market valuation of the Company’s net assets with its recorded book values. - Reduced operating cash utilization by 27 percent in 2017 compared to the same period in 2016.
“We are pleased with our fourth quarter and year performance, as we achieved double-digit revenue growth over 2016,” said
The Company will host a conference call and webcast at
To access the live webcast, please visit the Investors page of the CHF Solutions website at www.chf-solutions.com or access the webcast directly at https://edge.media-server.com/m6/p/dxgvnn8x. Alternatively, investors may access the live conference call by dialing (877) 303-9826 (U.S.) or (224) 357-2194 (international) and using conference ID 9684909. An audio archive of the webcast and the call script will be available following the call on the Investor page at www.chf-solutions.com.
FINANCIALS
| CHF SOLUTIONS, INC. AND SUBSIDIARIES Consolidated Statements of Operations and Comprehensive Loss (in thousands, except per share amounts) |
|||||||||||||||
| Three months ended December 31 |
Twelve months ended December 31, |
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| 2017 | 2016 | 2017 | 2016 | ||||||||||||
| Net sales | $ | 831 | $ | 746 | $ | 3,553 | $ | 1,289 | |||||||
| Costs and Expenses: | |||||||||||||||
| Cost of goods sold | 851 | 526 | 2,763 | 713 | |||||||||||
| Selling, general and administrative | 2,692 | 2,685 | 10,170 | 8,129 | |||||||||||
| Research and development | 479 | 598 | 1,481 | 8,109 | |||||||||||
| Goodwill and intangibles impairment | 3,951 | — | 3,951 | — | |||||||||||
| Total costs and expenses | 7,973 | 3,809 | 18,365 | 16,951 | |||||||||||
| Loss from operations | (7,142 | ) | (3,063 | ) | (14,812 | ) | (15,662 | ) | |||||||
| Other income (expense): | |||||||||||||||
| Interest expense | — | — | — | (504 | ) | ||||||||||
| Loss on early retirement of long-term debt | — | — | — | (500 | ) | ||||||||||
| Other income (expense), net | — | — | 28 | 2 | |||||||||||
| Warrant valuation expense | — | — | (67 | ) | — | ||||||||||
| Change in fair value of warrant liability | 5 | 172 | 1,475 | 818 | |||||||||||
| Total other income (expense) | 5 | 172 | 1,436 | (184 | ) | ||||||||||
| Loss before income taxes | (7,137 | ) | (2,891 | ) | (13,376 | ) | (15,846 | ) | |||||||
| Income tax (expense) benefit, net | — | (10 | ) | (6 | ) | 54 | |||||||||
| Net loss | $ | (7,137 | ) | $ | (2,901 | ) | $ | (13,382 | ) | $ | (15,792 | ) | |||
| Basic and diluted loss per share | $ | (10.00 | ) | $ | (133.36 | ) | $ | (37.51 | ) | $ | (536.12 | ) | |||
| Weighted average shares outstanding – basic and diluted | 1,587 | 36 | 665 | 33 | |||||||||||
| Other comprehensive income: | |||||||||||||||
| Foreign currency translation adjustment | $ | (1 | ) | $ | 1 | $ | (8 | ) | $ | (11 | ) | ||||
| Total comprehensive loss | $ | (7,138 | ) | $ | (2,900 | ) | $ | (13,390 | ) | $ | (15,803 | ) | |||
| CHF SOLUTIONS, INC. AND SUBSIDIARIES Consolidated Balance Sheets (in thousands, except share and per share amounts) |
||||||
| December 31, 2017 |
December 31, 2016 | |||||
| ASSETS | ||||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 15,595 | $ | 1,323 | ||
| Accounts receivable | 545 | 282 | ||||
| Inventories | 1,588 | 677 | ||||
| Other current assets | 136 | 137 | ||||
| Total current assets | 17,864 | 2,419 | ||||
| Property, plant and equipment, net | 570 | 540 | ||||
| Intangible assets, net | - | 4,302 | ||||
| Goodwill | - | 189 | ||||
| Other assets | 21 | 21 | ||||
| TOTAL ASSETS | $ | 18,455 | $ | 7,471 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
| Current liabilities | ||||||
| Accounts payable | $ | 862 | $ | 1,987 | ||
| Accrued compensation | 1,021 | 909 | ||||
| Other current liabilities | 208 | 364 | ||||
| Total current liabilities | 2,091 | 3,260 | ||||
| Common stock warrant liability | — | 1,843 | ||||
| Other liabilities | 126 | 126 | ||||
| Total liabilities | 2,217 | 5,229 | ||||
| Commitments and contingencies | — | — | ||||
| Temporary Stockholders’ Equity | ||||||
| Series D convertible preferred stock as of December 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 0 and 900 shares, respectively, issued and outstanding 0 and 700, respectively |
— | 485 | ||||
| Stockholders’ equity | ||||||
| Series A junior participating preferred stock as of December 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 30,000 shares, none outstanding |
— | — | ||||
| Series B-1 convertible preferred stock as of December 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 0 and 1,824.4 shares, respectively, issued and outstanding 0 and 1,824.4, respectively |
— | — | ||||
| Series C convertible preferred stock as of December 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 0 and 2,900 shares, respectively, issued and outstanding 0 and 2,900, respectively |
— | — | ||||
| Series F convertible preferred stock as of December 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 3,780 and 0 shares, respectively, issued and outstanding 3,780 and 0, respectively |
||||||
| Preferred stock as of December 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 39,966,220 and 39,964,375.6 shares, respectively, none outstanding |
— | — | ||||
| Common stock as of December 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 100,000,000 shares, issued and outstanding 3,798,929 and 38,862, respectively |
— | — | ||||
| Additional paid‑in capital | 197,367 | 169,496 | ||||
| Accumulated other comprehensive income: | ||||||
| Foreign currency translation adjustment | 1,227 | 1,235 | ||||
| Accumulated deficit | (182,356 | ) | (168,974 | ) | ||
| Total stockholders’ equity | 16,238 | 1,757 | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 18,455 | $ | 7,471 | ||
| CHF SOLUTIONS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (in thousands) |
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| For the years ended December 31, | ||||||||
| In thousands | 2017 | 2016 | ||||||
| Operating Activities | ||||||||
| Net loss | $ | (13,382 | ) | $ | (15,792 | ) | ||
| Adjustments to reconcile net loss to cash flows from operating activities: | ||||||||
| Depreciation and amortization | 769 | 697 | ||||||
| Stock based compensation expense, net | 499 | 949 | ||||||
| Amortization of debt discount and financing fees | — | 187 | ||||||
| Goodwill and intangibles impairment | 3,951 | — | ||||||
| Loss on retirement of long-term debt | — | 500 | ||||||
| Change in fair value of warrant liability | (1,475 | ) | (818 | ) | ||||
| Warrant valuation expense | 67 | — | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (263 | ) | (282 | ) | ||||
| Inventory | (911 | ) | (677 | ) | ||||
| Other current assets | 1 | 342 | ||||||
| Other assets and liabilities | — | (464 | ) | |||||
| Accounts payable and accrued expenses | (1,176 | ) | (934 | ) | ||||
| Net cash used in operations | (11,920 | ) | (16,292 | ) | ||||
| Investing activities: | ||||||||
| Purchase of property and equipment | (259 | ) | (117 | ) | ||||
| Purchase of Aquadex product line | — | (4,000 | ) | |||||
| Net cash used in investing activities | (259 | ) | (4,117 | ) | ||||
| Financing activities: | ||||||||
| Net proceeds from public stock offering | 24,281 | — | ||||||
| Net proceeds from exercise of warrants | 1,989 | — | ||||||
| Net proceeds from the sale of preferred stock, common stock and warrants | 184 | 6,636 | ||||||
| Repayments of long-term debt | — | (8,000 | ) | |||||
| Net cash provided by (used in) financing activities | 26,454 | (1,364 | ) | |||||
| Effect of exchange rate changes on cash | (3 | ) | (17 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 14,272 | (21,790 | ) | |||||
| Cash and cash equivalents—beginning of period | 1,323 | 23,113 | ||||||
| Cash and cash equivalents—end of period | $ | 15,595 | $ | 1,323 | ||||
| Supplemental schedule of non-cash activities | ||||||||
| Warrants issued as inducement to warrant exercise | $ | 509 | $ | — | ||||
| Conversion of temporary equity to permanent equity | $ | 485 | $ | — | ||||
| Common stock issued for business acquisition | $ | — | $ | 950 | ||||
| Supplemental cash flow information | ||||||||
| Interest paid on debt borrowings | $ | — | $ | 840 | ||||
| Cash paid for income taxes | $ | 6 | $ | 47 | ||||
About
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 impact of hiring sales staff and expansion of our distribution channels. 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 recently announced strategic realignment, 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
CONTACTS:
INVESTORS:
Chief Financial Officer
952-345-4205
ir@chf-solutions.com
-or-
Managing Partner
CORE IR
516-222-2560
brets@coreir.com
www.coreir.com
MEDIA
917-885-7378
jabraham@jqapartners.com
Source: CHF Solutions, Inc.
