Full Press Release Details
Marc Panoff, CFO Garth Russell / Todd Fromer
Nephros, Inc. KCSA Worldwide
Tel: 212-781-5113 212-896-1250 / 212-896-1215
Nephros Reports Fourth Quarter and Year End Financial Results
NEW YORK, March 31, 2005 - Nephros, Inc. (AMEX: NEP) announced today financial
results for the fourth quarter and fiscal year ended December 31, 2004.
For the 2004 fiscal year, Nephros reported net revenue of $138,406 compared
with no revenue in 2003. The Company's net loss for the year was $7,596,481
versus a net loss of $5,636,000 in the comparable period of the prior year.
Nephros reported a net loss attributable to common stockholders in 2004 of
$19,331,013, or $4.38 per basic and diluted share compared to $7,427,000, or
$4.66 per basic and diluted share, in the year-earlier period.
The net loss applicable to common shareholders includes losses attributed to
preferred dividends and accretion of beneficial conversion features and issuance
costs in connection with the issuance of convertible preferred stock. Total
preferred dividends and accretion amounted to $11,734,533 for the fiscal year
ended December 31, 2004, compared to $1,791,000 for the same period in 2003.
This increase in 2004 is due primarily to the accelerated accretion of the
beneficial conversion feature ("BCF") associated with our issuance of series D
convertible preferred stock. Accretion of this BCF was accelerated as a result
of the automatic conversion of all of our then-outstanding shares of preferred
stock in connection with our initial public offering.
Nephros reported net revenue of $92,027 for the fourth quarter ended December
31, 2004 compared with no revenue in the same period prior year. The net loss in
the quarter was $2,016,865 versus net income of 33,593 for the year-earlier
period. Net income for the fourth quarter ended December 31, 2003 included a
nonrecurring gain of approximately $1,269,000 attributable to the write-off of
legal expenses. For the 2004 fourth quarter, the Company reported a net loss
applicable to common stockholders of $2,016,866, or $0.17 per basic and diluted
share, compared to $1,277,407, or $0.80 per basic and diluted share, for the
same period in 2003. The net loss applicable to common shareholders for the
fourth quarter 2003 includes losses totaling $1,311,000 attributable to
preferred dividends and accretion of beneficial conversion features and issuance
costs in connection with the issuance of convertible preferred stock.
In September 2004, Nephros raised $10,784,586 in net proceeds from its initial
public offering (IPO) of 2,100,000 shares of common stock at a price of $6.00
per share. The weighted average common shares outstanding for the three months
ended December 31, 2004 were 12,120,248 shares compared to 1,593,659 shares in
the corresponding period a year ago.
Norman Barta, chief executive officer of Nephros, said, "2004 was a historic
year for Nephros. In addition to the completion of our IPO, we commenced company
sales in 2004 with the launch of our advanced OLpur(TM) MD 190 hemodiafilter in
the European market. We continue to expand the distribution of our core
technology for the treatment of End Stage Renal Disease in Europe, as well as
Japan, and have recently taken initial steps toward introducing our products in
Nephros, Inc., headquartered in New York, is a medical device company developing
and marketing products designed to improve the quality of life for the End Stage
Renal Disease (ESRD) patient, while addressing the critical financial and
clinical needs of the care provider. ESRD is a disease state characterized by
the irreversible loss of kidney function. Nephros believes that its products are
designed to remove a range of harmful substances more effectively, and more
cost-effectively, than existing treatment methods; particularly with respect to
substances known collectively as "middle molecules", due to their molecular
weight, that have been found to contribute to such conditions as dialysis
related amyloidosis, carpal tunnel syndrome, degenerative bone disease and
ultimately, to mortality in the ESRD patient.
Forward Looking Statements
This news release contains certain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
statements, including statements regarding the efficacy and intended utilization
of Nephros's technologies under development, are not guarantees of future
performance, are based on certain assumptions and are subject to risks and
uncertainties, many of which are beyond the control of Nephros. Actual results
may differ materially from the expectations contained in the forward-looking
statements. Factors that may cause such differences include the risk that
potential products that appeared promising in early research or clinical trials
to Nephros do not demonstrate efficacy or safety in subsequent pre-clinical or
clinical trials, and the risk that Nephros will not obtain appropriate or
necessary governmental approvals to market products. More detailed information
about Nephros and the risk factors discussed above is set forth in Nephros'
filings with the Securities and Exchange Commission, including Nephros's
Quarterly Report on Form 10-QSB filed with the SEC on November 15, 2004.
Investors and security holders are urged to read such document free of charge at
the Commission's web site at www.sec.gov. Nephros does not undertake an
obligation to publicly update or revise its forward-looking statements as a
result of new information, future events or otherwise.