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CHF Solutions, Inc. Announces 17 Percent Increase in Revenues for First Quarter 2019 Over Previous Year and Provides Company Update

May 7, 2019

EDEN PRAIRIE, Minn., May 07, 2019 (GLOBE NEWSWIRE) -- CHF Solutions, Inc. (Nasdaq: CHFS) announced today its results for the first quarter ended March 31, 2019, which included the following highlights:

  • Revenue for first quarter ended March 31, 2019 was $1.2 million, an increase of 17 percent compared to the same period of the prior year. Gross margin percentages increased to 50 percent from 13 percent from the same period a year ago, after transition to in-house manufactured inventory.
  • Continued progress towards obtaining regulatory clearance for an expanded label in pediatrics. Pre-submission meeting with the FDA scheduled for May 2019.
  • Continued expansion into cardiovascular surgery and announced the launch of two new accounts with surgery focus.
  • Exhibited at three cardiovascular surgery conferences: Society of Thoracic Surgeons in January 2019, International Conference of Heart and Lung Transplantation in March 2019, and the American Association for Thoracic Surgery conference in May 2019. Sponsored seminar led by renowned cardiothoracic surgeon, Dr. Daniel Beckles, MD, PhD.
  • Announced the publication of an article in the Journal of Medical Economics, a peer reviewed journal that evaluated the cost saving benefits of the Aquadex FlexFlow® system in the hospital setting.
  • Closed on an underwritten public offering of stock, for net proceeds of $11.0 million. Ended quarter with $11.5 million in cash and no debt.

“We began the year strong with continued double-digit increase in our revenues over the previous year 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
March 31,
    2019      2018   
Net sales $ 1,215   $ 1,037  
Costs and Expenses:            
Cost of goods sold   612     901  
Selling, general and administrative   4,018     4,011  
Research and development   1,310     479  
Total costs and expenses   5,940     5,391  
Loss from operations   (4,725 )   (4,354 )
Loss before income taxes   (4,725 )   (4,354 )
Income tax expense   (2 )    
Net loss $ (4,727 ) $ (4,354 )
             
Basic and diluted loss per share $ (11.47 ) $ (15.12 )
             
Weighted average shares outstanding – basic and diluted   805     288  
             
Other comprehensive income:            
Foreign currency translation adjustments $ (2 ) $ 1  
Total comprehensive loss $ (4,729 ) $ (4,353 )



CHF SOLUTIONS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)

    March 31,
2019
    December 31, 2018  
ASSETS   (unaudited)        
Current assets            
Cash and cash equivalents $ 11,489   $ 5,480  
Accounts receivable   622     786  
Inventory   1,790     1,658  
Other current assets   350     203  
Total current assets   14,251     8,127  
Property, plant and equipment, net   518     536  
Operating lease right-of-use asset   574      
Other assets   20     113  
TOTAL ASSETS $ 15,363   $ 8,776  
             
LIABILITIES AND STOCKHOLDERS’ EQUITY            
Current liabilities            
Accounts payable $ 1,202   $ 1,133  
Accrued compensation   831     1,498  
Current portion of operating lease liability   171      
Other current liabilities   228     209  
Total current liabilities   2,432     2,840  
Operating lease liability   403     -  
Total liabilities   2,835     2,840  
             
Commitments and contingencies        
             
Stockholders’ equity            
Series A junior participating preferred stock as of March 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 March 31, 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 March 31, 2019 and December 31, 2018, par value $0.0001 per share; authorized 810,142 and 0 shares, respectively, issued and outstanding 810,142 and 0, respectively            
Preferred stock as of March 31, 2019 and December 31, 2018, par value
$0.0001 per share; authorized 39,159,323 and 39,969,465 shares, none outstanding
       
Common stock as of March 31, 2019 and December 31, 2018, par value
$0.0001 per share; authorized 100,000,000 shares, issued and outstanding
2,069,020 and 513,445, respectively
       
Additional paid‑in capital   215,422     204,101  
Accumulated other comprehensive income:            
Foreign currency translation adjustment   1,221     1,223  
Accumulated deficit   (204,115 )   (199,388 )
Total stockholders’ equity   12,528     5,936  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 15,363   $ 8,776  



CHF SOLUTIONS, INC. AND SUBSIDIARIES

Condensed 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  
                                     
    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  



CHF SOLUTIONS, INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited and in thousands)

      Three months ended
March 31,
 
       2019
  2018
 
             
Operating Activities:     
Net loss   $ (4,727 ) $ (4,354 )
Adjustments to reconcile net loss to cash flows used in operating activities:              
Depreciation and amortization     59     54  
Stock-based compensation expense, net     362     500  
Changes in operating assets and liabilities:              
Accounts receivable     164     (113 )
Inventory     (132 )   (937 )
Other current assets     (147 )   6  
Other assets and liabilities     112      
Accounts payable and accrued expenses     (598 )   (192 )
Net cash used in operating activities     (4,907 )   (5,036 )
               
Investing Activities:              
Purchases of property and equipment     (41 )   (57 )
Net cash used in investing activities     (41 )   (57 )
               
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     (2 )   2  
Net increase (decrease) in cash and cash equivalents     6,009     (5,091 )
Cash and cash equivalents - beginning of period     5,480     15,595  
Cash and cash equivalents - end of period   $ 11,489   $ 10,504  
               
Supplemental cash flow information              
Cash paid for income taxes   $   $  
               

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: 7369669.  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 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 mission is to predict, measure, and control patient fluid balance 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 in future quarters. 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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Source: CHF Solutions, Inc.