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CHF Solutions, Inc. Announces 42% Revenue Growth for its Third Quarter and Provides Company Update

Nov 6, 2018

EDEN PRAIRIE, Minn., Nov. 06, 2018 (GLOBE NEWSWIRE) -- CHF Solutions, Inc. (NASDAQ: CHFS) announced today its third quarter results for the period ended September 30, 2018.  Highlights include:

  • Revenue for third quarter ended September 30, 2018 increased 42 percent compared to the same period in 2017, and 24 percent sequentially over the second quarter of 2018.
     
  • Announced expansion into the post-surgical cardiovascular market, an adjacent market opportunity with a significant unmet clinical need.

  • Continued international expansion and announced entrance into the markets in Germany and Thailand.

  • Continued path to identify complementary diagnostic technologies. Completed acquisition of AcQtrac™ impedance technology and announced collaboration agreements with NIMedical and Daxor Corporation to evaluate available, market-cleared diagnostic technologies.

  • Announced completion of all manufacturing transfer activities from Baxter.

  • Ended the quarter with $8.2 million of cash and equivalents and no debt.

“We have delivered double-digit year over year quarterly growth for six quarters in a row,” said John Erb, Chairman and CEO. “We continue to execute on our strategy and deliver results.”

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 Investor Relations | CHF Solutions, Inc. Alternatively, you may access the live conference call by dialing (877) 303-9826 (U.S.) or (224) 357-2194 (international) and using conference ID: 8283328. An audio archive of the webcast will be available following the call at Investor Relations | CHF Solutions, Inc.

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
September 30,
Nine months ended
September 30,
  2018 2017 2018 2017
Net sales $ 1,363   $ 957   $ 3,499   $ 2,722  
Costs and expenses:                        
Cost of goods sold   915     782     2,686     1,912  
Selling, general and administrative   3,713     2,671     11,489     7,478  
Research and development   985     367     2,107     1,002  
Total costs and expenses   5,613     3,820     16,282     10,392  
Loss from operations   (4,250 )   (2,863 )   (12,783 )   (7,670 )
Other income (expense):                        
Other income, net   10     17     10     28  
Warrant valuation expense   -     -     -     (67 )
Change in fair value of warrant liability   -     4     -     1,470  
Total other income   10     21     10     1,431  
Loss before income taxes   (4,240 )   (2,842 )   (12,773 )   (6,239 )
Income tax expense, net   (1 )   (5 )   (3 )   (6 )
Net loss $ (4,241 ) $ (2,847 ) $ (12,776 ) $ (6,245 )
                         
Basic and diluted loss per share $ (0.61 ) $ (4.55 ) $ (2.47 ) $ (25.36 )
                         
Weighted average shares outstanding – basic and diluted   6,987     626     5,171     359  
                         
Other comprehensive loss:                        
Foreign currency translation adjustments $ (1 ) $ (1 ) $ (2 ) $ (7 )
Total comprehensive loss $ (4,242 ) $ (2,848 ) $ (12,778 ) $ (6,252 )
 


 
CHF SOLUTIONS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
 
    September 30,
2018
(unaudited)
    December
31, 2017
 
ASSETS            
Current assets            
Cash and cash equivalents $ 8,222   $ 15,595  
Accounts receivable   787     545  
Inventory   1,948     1,588  
Other current assets   240     136  
Total current assets   11,197     17,864  
Property, plant and equipment, net   573     570  
Other assets   21     21  
TOTAL ASSETS $ 11,791   $ 18,455  
             
LIABILITIES AND STOCKHOLDERS’ EQUITY            
Current liabilities            
Accounts payable and accrued expenses $ 617   $ 862  
Accrued compensation   1,315     1,021  
Other current liabilities   80     208  
Total current liabilities   2,012     2,091  
Other liabilities   126     126  
Total liabilities   2,138     2,217  
             
Commitments and contingencies  
 —
     
             
Stockholders’ equity            
Series A junior participating preferred stock as of September 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 September 30, 2018 and December 31, 2017, par value $0.0001 per share; authorized 565 and 3,780 shares, respectively, issued and outstanding 565 and 3,780, respectively        
Preferred stock as of September 30, 2018 and December 31, 2017, par value $0.0001 per share; authorized 39,969,435 and 39,966,220 shares, none outstanding        
Common stock as of September 30, 2018 and December 31, 2017, par value $0.0001 per share; authorized 100,000,000 shares, issued and outstanding 7,074,407 and 3,798,929, respectively   1      
Additional paid‑in capital   203,559     197,367  
Accumulated other comprehensive income:            
Foreign currency translation adjustment   1,225     1,227  
Accumulated deficit   (195,132 )   (182,356 )
Total stockholders’ equity   9,653     16,238  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 11,791   $ 18,455  
 


 
CHF SOLUTIONS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
 
  Nine months ended
September 30,
    2018 2017
Operating Activities:        
Net loss $ (12,776 ) $ (6,245 )
Adjustments to reconcile net loss to cash flows used in operating activities:            
Depreciation and amortization expense   174     656  
Stock-based compensation expense   1,544     391  
Change in fair value of warrant liability   -     (1,470 )
Warrant valuation expense   -     67  
Changes in operating assets and liabilities:            
Accounts receivable   (242 )   (498 )
Inventory   (361 )   (660 )
Other current and long-term assets   (104 )   28  
Accounts payable and accrued expenses   (78 )   (1,038 )
Net cash used in operations   (11,843 )   (8,769 )
             
Investing Activities:            
Purchases of property and equipment   (177 )   (206 )
Net cash used in investing activities   (177 )   (206 )
             
Financing Activities:            
Net proceeds from public stock offering   4,649     8,002  
Net proceeds from exercise of warrants   -     1,981  
Net proceeds from the sale of common stock, preferred stock, and warrants   -     184  
Net cash provided by financing activities   4,649     10,167  
             
Effect of exchange rate changes on cash   (2 )   (2 )
Net increase (decrease) in cash and cash equivalents   (7,373 )   1,190  
Cash and cash equivalents - beginning of period   15,595     1,323  
Cash and cash equivalents - end of period $ 8,222   $ 2,513  
             
Supplement schedule of non-cash activities            
Warrants issued as inducement to warrant exercise $ -   $ 509  
Conversion of temporary equity to permanent equity $ -   $ 485  
             
Supplemental cash flow information            
Cash paid for income taxes $ -   $ 8  
             

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.