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CHF Solutions, Inc. Announces 27% Revenue Growth for its Second Quarter and Provides Company Update

Aug 7, 2018

EDEN PRAIRIE, Minn., Aug. 07, 2018 (GLOBE NEWSWIRE) -- CHF Solutions, Inc. (NASDAQ: CHFS) announced today its second quarter results for the period ended June 30, 2018.  Highlights include:

  • Revenue for second quarter ended June 30, 2018 increased 27 percent compared to the same period in 2017 and six percent sequentially over the first quarter of 2018.
  • Expanded US sales territories from ten to 13 and hired and trained three additional sales representatives.
  • In July 2018, received a blanket purchase agreement from the United States Department of Veteran’s Affairs for up to a maximum of $6.5 million to supply Aquadex FlexFlow systems for outpatient services. The blanket purchase agreement is for a period of up to five-years and allows but does not obligate the purchase of the products.
  • Recently published data at the International Society for Pharmaeconomics and Outcomes Research conference shows that hospitals that use an ultrafiltration system versus diuretic therapy save an average of $3,975 per patient at 90 days due to a reduction of patient readmission rates and duration of stay.
  • Continued international expansion and announced entrance into the German market by signing an agreement with HSC, our current European logistics provider.
  • Subsequent to quarter end, completed an underwritten public equity offering for net proceeds of approximately $4.7 million.

“We have continued to incrementally execute on our expansion strategy, including continued upward trends in our revenue,” said John Erb, Chairman and CEO. “We continue to be optimistic about our future growth and look forward to reporting further developments.”

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 www.chf-solutions.com. Alternatively, you may access the live conference call by dialing (877) 303-9826 (U.S.) or (224) 357-2194 (international) and using conference ID 8576075. An audio archive of the webcast will be available following the call on the Investor page at www.chf-solutions.com.

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 statement regarding the benefits from using the Aquadex FlexFlow, trends in our revenue, our expansion plan and our future growth and developments.  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, 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 SUBSIDIARIES
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited and in thousands, except per share amounts)
 

 
  Three months ended
June 30,
Six months ended
June 30,
    2018   2017       2018 2017
Net sales $ 1,099   $ 864   $ 2,136   $ 1,765  
Costs and expenses:                        
  Cost of goods sold   870     616     1,771     1,130  
  Selling, general and administrative   3,765     2,420     7,776     4,807  
  Research and development   643     327     1,122     635  
  Total costs and expenses   5,278     3,363     10,669     6,572  
  Loss from operations   (4,179 )   (2,499 )   (8,533 )   (4,807 )
Other income (expense):                        
  Other income, net   -     5     -     11  
  Warrant valuation expense   -     -     -     (67 )
  Change in fair value of warrant liability   -     37     -     1,466  
  Total other income, net   -     42     -     1,410  
  Loss before income taxes   (4,179 )   (2,457 )   (8,533 )   (3,397 )
  Income tax benefit (expense), net   (2 )   (1 )   (2 )   (1 )
Net loss $ (4,181 ) $ (2,458 ) $ (8,535 ) $ (3,398 )
                         
Basic and diluted loss per share $ (0.93 ) $ (9.38 ) $ (2.00 ) $ (27.77 )
                         
Weighted average shares outstanding – basic and diluted   4,494     371     4,263     225  
                         
Other comprehensive loss:                        
  Foreign currency translation adjustments $ (2 ) $ (5 ) $ (1 ) $ (6 )
Total comprehensive loss $ (4,183 ) $ (2,463 ) $ (8,536 ) $ (3,404 )

 

     
     
CHF SOLUTIONS, INC. AND SUBSIDIARIES    
Condensed Consolidated Balance Sheets    
(in thousands, except share and per share amounts)    
     
    June 30,
2018 (unaudited)
    December 31, 2017

   
ASSETS              
Current assets              
  Cash and cash equivalents   $ 6,995   $ 15,595    
  Accounts receivable   652     545    
  Inventory   2,315     1,588    
  Other current assets   205     136    
Total current assets   10,167     17,864    
  Property, plant and equipment, net   576     570    
  Other assets   195     21    
TOTAL ASSETS $ 10,938   $ 18,455    
               
LIABILITIES AND STOCKHOLDERS’ EQUITY              
Current liabilities              
  Accounts payable and accrued expenses $ 838   $ 862    
  Accrued compensation   979     1,021    
  Other current liabilities   186     208    
Total current liabilities   2,003     2,091    
  Other liabilities   126     126    
Total liabilities   2,129     2,217    
               
Commitments and contingencies     —       —    
               
Stockholders’ equity              
Series A junior participating preferred stock as of June 30, 2018 and December 31, 2017, par value $0.0001 per share; authorized 30,000 shares, none outstanding          
Series F convertible preferred stock as of June 30, 2018 and December 31, 2017, par value $0.0001 per share; authorized 610 and 3,780 shares, respectively, issued and outstanding 610 and 3,780, respectively          
Preferred stock as of June 30, 2018 and December 31, 2017, par value
$0.0001 per share; authorized 39,969,390 and 39,966,220 shares, none outstanding
    —       —    
Common stock as of June 30, 2018 and December 31, 2017, par value
$0.0001 per share; authorized 100,000,000 shares, issued and outstanding
4,505,953 and 3,798,929, respectively
   —        
Additional paid‑in capital   198,474     197,367    
Accumulated other comprehensive income:              
  Foreign currency translation adjustment   1,226     1,227    
Accumulated deficit   (190,891 )   (182,356 )  
Total stockholders’ equity   8,809     16,238    
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 10,938   $ 18,455  

 

   
CHF SOLUTIONS, INC. AND SUBSIDIARIES  
Condensed Consolidated Statements of Cash Flows  
(Unaudited, in thousands)  
   
    Six months ended
June 30,
 
    2018     2017    
Operating Activities:              
Net loss $ (8,535 ) $ (3,398 )
Adjustments to reconcile net loss to cash flows used in operating activities:            
  Depreciation and amortization expense   115     436  
  Stock-based compensation expense, net   1,107     281  
  Change in fair value of warrant liability   -     (1,466 )
  Warrant valuation expense   -     67  
Changes in operating assets and liabilities:            
  Accounts receivable   (107 )   (336 )
  Inventory   (727 )   (187 )
  Other current assets   (48 )   8  
  Accounts payable and accrued expenses   (283 )   (1,103 )
Net cash used in operations   (8,478 )   (5,698 )
             
Investing Activities:            
  Purchases of property and equipment   (121 )   (20 )
Net cash used in investing activities   (121 )   (20 )
             
Financing Activities:            
  Net proceeds from public stock offering   -     8,002  
  Net proceeds from exercise of warrants   -     1,768  
  Net proceeds from the sale of preferred stock and warrants   -     184  
Net cash (used in) provided by financing activities   -     9,954  
             
Effect of exchange rate changes on cash   (1 )   (1 )
Net (decrease) increase in cash and cash equivalents   (8,600 )   4,235  
Cash and cash equivalents - beginning of period   15,595     1,323  
Cash and cash equivalents - end of period $ 6,995   $ 5,558  
             
Supplement schedule of non-cash activities            
  Warrants issued as inducement to warrant exercise $ -   $ 509  
  Conversion of temporary equity to permanent equity $ -   $ 485  
  Financing fees included in long-term assets and accounts payable $ 195   $ -  
             

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.