Full Press Release Details
Announces Fourth Quarter and Fiscal Year 2021 Financial Results
Full-Year Net Revenue of $10.4 Million, a 22% Year-Over-Year Increase and
Fourth Quarter Net Revenue of $2.8 Million, an 18% Year-Over-Year Increase;
Reaffirms Fiscal Year 2022 Guidance of $13.0 Million to $13.5 Million in Annual Revenue
ORANGE, NJ, February 23, 2022 - Nephros, Inc. (Nasdaq: NEPH), a leading water technology company providing filtration and
pathogen detection solutions to the medical and commercial markets, today announced financial results for the fourth quarter and fiscal
year ended December 31, 2021.
Quarter Ended December 31, 2021 - Water Filtration Business Segment
| Net revenue was $2.7 million, compared with $2.3 million in 2020, up 16% | ||
| Operating loss was ($0.7 million), compared to ($0.3 million) in 2020 | ||
| Adjusted Operating Loss was ($64,000), compared with ($10,000) in 2020 |
Quarter Ended December 31, 2021 - Consolidated
| Net revenue was $2.8 million, compared with $2.3 million in 2020, up 18% | ||
| Net loss was ($1.0 million), compared with ($0.8 million) in 2020, up 37% | ||
| Adjusted EBITDA was ($0.4 million), compared with ($0.5 million) in 2020 |
2021 - Water Filtration Business Segment
| Net revenue was $10.2 million, compared with $8.5 million in 2020, up 20% | ||
| Operating loss was ($2.9 million), compared with a net loss of ($2.0 million) in 2020 | ||
| Adjusted Operating Loss was ($1.3 million) in 2021 and 2020 |
| Net revenue was $10.4 million, compared with $8.6 million in 2020, up 22 % | ||
| Net loss was ($3.9 million), compared with ($4.5 million) in 2020, down 15% | ||
| Adjusted EBITDA was ($2.6 million), compared with ($3.6 million) in 2020 |
are pleased to report that Nephros delivered four consecutive quarters of year-over-year growth averaging 19%, ending the year at a new
revenue record for the company," said Andy Astor, President and Chief Executive Officer of Nephros. "Looking forward to 2022,
we believe our recent investments into a scalable sales and marketing infrastructure, along with the expected retreat of COVID-19 to
endemic state, will bring our growth rates even higher, as evidenced by our recent revenue guidance of $13.0-13.5 million, or 25-30%
Performance for the Fourth Quarter and Year Ended December 31, 2021
revenue for the year ended December 31, 2021 was $10.4 million, compared with $8.6 million in 2020, an increase of 22%. Net revenues
for the fourth quarter of 2021 were $2.8 million, compared with $2.3 million in the fourth quarter of 2020, an increase of 18%.
of goods sold for the year ended December 31, 2021 was $4.7 million, compared with $3.6 million in 2020, an increase of 28%. Cost of
goods sold for the fourth quarter of 2021 was $1.3 million, compared with $1 million in the fourth quarter of 2020, an increase of 26%.
margins for the year ended December 31, 2021 were 55%, compared with 57% in 2020. Gross margins for the fourth quarter of 2021 were 53%,
compared with 56% in the fourth quarter of 2020.
general and administrative expenses for the year ended December 31, 2021 were $7.7 million, compared with $6.5 million in 2020, an increase
of 19%. Selling, general and administrative expenses for the fourth quarter of 2021 were approximately $2 million compared with approximately
$1.4 million in the fourth quarter of 2020, an increase of 44%.
and development expenses for the year ended December 31, 2021 were $2.2 million, compared with $2.8 million in 2020, a decrease of 21%.
Research and development expenses for the fourth quarter of 2021 were $0.5 million, compared with $0.6 million in the fourth quarter
of 2020, a decrease of 19%.
and amortization expenses for the year ended December 31, 2021 were approximately $202,000, compared with approximately $192,000 in 2020,
an increase of 5%. Depreciation and amortization expenses for the fourth quarter of 2021 were approximately $51,000, compared with approximately
$50,000 in the fourth quarter of 2020, an increase of 2%.
loss for the year ended December 31, 2021 was ($3.9 million), compared with a net loss of ($4.5 million) in 2020, a 15% decrease in loss.
Net loss for the fourth quarter of 2021 was approximately ($1 million), compared with a net loss of approximately ($0.8 million) in the
fourth quarter of 2020, a 37% increase.
EBITDA for the year ended December 31, 2021 was ($2.6 million), compared with ($3.6 million) in 2020, a 29% decrease. Adjusted EBITDA
for the fourth quarter 2021 was approximately ($0.4 million), compared with approximately ($0.5 million) in the fourth quarter of 2020,
of December 31, 2021, Nephros had cash and cash equivalents of approximately $7.0 million.
Filtration Adjusted Operating Loss Definition and Reconciliation to GAAP Financial Measures
Filtration Adjusted Operating Loss is calculated by taking operating loss calculated in accordance with generally accepted accounting
principles ("GAAP") and excluding all non-recurring expenses and income, and non-cash items, including depreciation and amortization
and non-cash compensation. The following table presents a reconciliation of Water Filtration Adjusted Operating Loss to operating loss,
the most directly comparable GAAP financial measure for segment reporting, for the 2021 and 2020 fiscal years:
| 2021 | Three Month Period Ended | Annual | ||||||||||||||||||
| 3/31/2021 | 6/30/2021 | 9/30/2021 | 12/31/2021 | Totals | ||||||||||||||||
| Operating loss | $ | (634 | ) | $ | (875 | ) | $ | (755 | ) | $ | (670 | ) | $ | (2,934 | ) | |||||
| Adjustments: | ||||||||||||||||||||
| Depreciation of property and equipment | 7 | 7 | 7 | 16 | 37 | |||||||||||||||
| Amortization of other assets | 46 | 48 | 46 | 74 | 214 | |||||||||||||||
| Non-cash stock-based compensation | 265 | 269 | 257 | 422 | 1,213 | |||||||||||||||
| Other non-cash items | 5 | 24 | 90 | 94 | 213 | |||||||||||||||
| Adjusted EBITDA | $ | (311 | ) | $ | (527 | ) | $ | (355 | ) | $ | (64 | ) | $ | (1,257 | ) |
| 2020 | Three Month Period Ended | Annual | ||||||||||||||||||
| 3/31/2020 | 6/30/2020 | 9/30/2020 | 12/31/2020 | Totals | ||||||||||||||||
| Operating loss | $ | (548 | ) | $ | (852 | ) | $ | (311 | ) | $ | (285 | ) | $ | (1,996 | ) | |||||
| Adjustments: | ||||||||||||||||||||
| Depreciation of property and equipment | 5 | 6 | 7 | 7 | 25 | |||||||||||||||
| Amortization of other assets | 45 | 45 | 46 | 47 | 183 | |||||||||||||||
| Change in FV of contingent consideration | (42 | ) | - | (187 | ) | - | (229 | ) | ||||||||||||
| Non-cash stock-based compensation | 190 | 166 | 160 | 200 | 716 | |||||||||||||||
| Other non-cash items | 11 | 12 | 2 | 21 | 46 | |||||||||||||||
| Adjusted EBITDA | $ | (339 | ) | $ | (623 | ) | $ | (283 | ) | $ | (10 | ) | $ | (1,255 | ) |
Adjusted EBITDA Definition and Reconciliation to GAAP Financial Measures
Adjusted EBITDA is calculated by taking net loss calculated in accordance with generally accepted accounting principles ("GAAP")
and excluding all interest-related expenses and income, non-recurring expenses and income, and non-cash items, including depreciation
and amortization and non-cash compensation. The following table presents a reconciliation of Consolidated Adjusted EBITDA to net loss,
the most directly comparable GAAP financial measure, for the 2021 and 2020 fiscal years:
| Consolidated (unaudited) | ||||||||||||||||||||
| 2021 | Three Month Period Ended | Annual | ||||||||||||||||||
| Consolidated | 3/31/2021 | 6/30/2021 | 9/30/2021 | 12/31/2021 | Totals | |||||||||||||||
| Net loss | $ | (537 | ) | $ | (1,126 | ) | $ | (1,163 | ) | $ | (1,041 | ) | $ | (3,867 | ) | |||||
| Adjustments: | ||||||||||||||||||||
| Depreciation of property and equipment | 7 | 8 | 7 | 16 | 38 | |||||||||||||||
| Amortization of other assets | 46 | 48 | 46 | 74 | 214 | |||||||||||||||
| Interest expense | 13 | 11 | 10 | 7 | 41 | |||||||||||||||
| Interest income | (3 | ) | (3 | ) | (2 | ) | (2 | ) | (10 | ) | ||||||||||
| Non-cash stock-based compensation | 276 | 281 | 268 | 434 | 1,259 | |||||||||||||||
| Other non-cash items | 5 | 24 | 90 | 97 | 216 | |||||||||||||||
| PPP Loan Forgiveness | (482 | ) | - | - | - | (482 | ) | |||||||||||||
| Adjusted EBITDA | $ | (675 | ) | $ | (757 | ) | $ | (744 | ) | $ | (415 | ) | $ | (2,591 | ) |
| 2020 | Three Month Period Ended | Annual | ||||||||||||||||||
| Consolidated | 3/31/2020 | 6/30/2020 | 9/30/2020 | 12/31/2020 | Totals | |||||||||||||||
| Net loss | $ | (1,098 | ) | $ | (1,657 | ) | $ | (1,012 | ) | $ | (759 | ) | $ | (4,526 | ) | |||||
| Adjustments: | ||||||||||||||||||||
| Depreciation of property and equipment | 5 | 6 | 7 | 7 | 25 | |||||||||||||||
| Amortization of other assets | 45 | 45 | 46 | 47 | 183 | |||||||||||||||
| Interest expense | 43 | 30 | 22 | 15 | 110 | |||||||||||||||
| Interest income | (1 | ) | (4 | ) | (3 | ) | (3 | ) | (11 | ) | ||||||||||
| Change in FV of contingent consideration | (42 | ) | - | (187 | ) | - | (229 | ) | ||||||||||||
| Non-cash stock-based compensation | 222 | 179 | 172 | 206 | 779 | |||||||||||||||
| Other non-cash items | 11 | 12 | 2 | 21 | 46 | |||||||||||||||
| Adjusted EBITDA | $ | (815 | ) | $ | (1,389 | ) | $ | (953 | ) | $ | (466 | ) | $ | (3,623 | ) |
believes that Adjusted EBITDA provides useful information to management and investors regarding certain financial and business trends
relating to Nephros's financial condition and results of operations. Management does not consider Adjusted EBITDA in isolation
or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of Adjusted EBITDA is that it
excludes significant expenses and income that are required by GAAP to be recognized in Nephros's consolidated financial statements.
In addition, Adjusted EBITDA is subject to inherent limitations as it reflects the exercise of judgments by management about which expenses
and income are excluded or included in determining Adjusted EBITDA. In order to compensate for these limitations, management presents
Adjusted EBITDA in connection with net loss, the most directly comparable GAAP financial measure. Nephros urges investors to review the
reconciliation of Adjusted EBITDA to net loss and not to rely on any single financial measure to evaluate the business.
Call Today at 4:30pm Eastern Time
will host a conference call today at 4:30pm ET, during which management will discuss Nephros's financial results and provide a
general business overview.
may dial into the following number to access the call: 1 (844) 808-7106. International callers may use 1 (412) 317-5285. Please ask to
be joined into the Nephros conference call. A replay of the call can be accessed until March 2, 2022 at 1 (877) 344-7529 or 1 (412) 317-0088
for international callers and entering replay access code: 8949087. An audio archive of the call will be available shortly after the
call on the Nephros investor relations page at https://investors.nephros.com/events/.
Inc. is a company committed to improving the human relationship with water through leading, accessible technology. We provide innovative
filtration and pathogen detection as part of an integrated approach to water safety that combines science, solutions, and support services.
Nephros products serve the needs of customers within the healthcare and commercial markets, offering both proactive and emergency responses
for water management. For more information about Nephros, please visit www.nephros.com.
release contains forward-looking statements that are subject to various risks and uncertainties. Such statements include statements regarding
Nephros's expected revenue for the quarter and year ended December 31, 2021, expected future revenue growth and the timing of such
growth, and other statements that are not historical facts, including statements that may be accompanied by the words "intends,"
"may," "will," "plans," "expects," "anticipates," "projects,"
"predicts," "estimates," "aims," "believes," "hopes," "potential"
or similar words. Actual results could differ materially from those described in these forward-looking statements due to certain factors,
including the impact of the ongoing COVID-19 pandemic, uncertainty in clinical outcomes, potential delays in the regulatory approval
process, changes in business, economic and competitive conditions, the availability of capital when needed, dependence on third-party
manufacturers and researchers, regulatory reforms, uncertainties in litigation or investigative proceedings, and the availability of
financing. These and other risks and uncertainties are detailed in Nephros's reports filed with the U.S. Securities and Exchange
Commission. Nephros does not undertake any responsibility to update the forward-looking statements in this release.
INC. AND SUBSIDIARIES
thousands, except share and per share amounts)
| December 31, 2021 | December 31, 2020 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 6,973 | $ | 8,249 | ||||
| Accounts receivable, net | 1,641 | 1,364 | ||||||
| Inventory | 4,795 | 5,304 | ||||||
| Prepaid expenses and other current assets | 225 | 237 | ||||||
| Total current assets | 13,634 | 15,154 | ||||||
| Property and equipment, net | 366 | 295 | ||||||
| Lease right-of-use assets | 730 | 1,037 | ||||||
| Intangible assets, net | 1,536 | 506 | ||||||
| Goodwill | 759 | 759 | ||||||
| License and supply agreement, net | 536 | 670 | ||||||
| Other assets | 89 | 89 | ||||||
| TOTAL ASSETS | $ | 17,650 | $ | 18,510 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current portion of secured note payable | $ | 248 | $ | 229 | ||||
| Accounts payable | 1,334 | 423 | ||||||
| Accrued expenses | 444 | 341 | ||||||
| Current portion of lease liabilities | 364 | 332 | ||||||
| Total current liabilities | 2,390 | 1,325 | ||||||
| Secured note payable, net of current portion | 95 | 364 | ||||||
| PPP loan | - | 482 | ||||||
| Equipment financing, net of current portion | 4 | 7 | ||||||
| Lease liabilities, net of current portion | 412 | 759 | ||||||
| TOTAL LIABILITIES | 2,901 | 2,937 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Preferred stock, $.001 par value; 5,000,000 shares authorized at December 31, 2021 and 2020; no shares issued and outstanding at December 31, 2021 and 2020 | - | - | ||||||
| Common stock, $.001 par value; 40,000,000 shares authorized at December 31, 2021 and 2020; 10,258,444 and 9,873,006 shares issued and outstanding at December 31, 2021 and 2020, respectively | 10 | 10 | ||||||
| Additional paid-in capital | 147,346 | 144,296 | ||||||
| Accumulated other comprehensive income | 64 | 74 | ||||||
| Accumulated deficit | (135,725 | ) | (131,858 | ) | ||||
| Subtotal | 11,695 | 12,522 | ||||||
| Noncontrolling interest | 3,054 | 3,051 | ||||||
| TOTAL STOCKHOLDERS' EQUITY | 14,749 | 15,573 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 17,650 | $ | 18,510 |
INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
thousands, except share and per share amounts)
| Years Ended December 31, | ||||||||
| 2021 (unaudited) | 2020 | |||||||
| Net revenue: | ||||||||
| Product revenues | $ | 10,204 | $ | 8,453 | ||||
| Royalty and other revenues | 200 | 108 | ||||||
| Total net revenues | 10,404 | 8,561 | ||||||
| Cost of goods sold | 4,661 | 3,648 | ||||||
| Gross margin | 5,743 | 4,913 | ||||||
| Operating expenses: | ||||||||
| Selling, general and administrative | 7,710 | 6,466 | ||||||
| Research and development | 2,166 | 2,759 | ||||||
| Depreciation and amortization | 202 | 192 | ||||||
| Change in fair value of contingent consideration | - | (229 | ) | |||||
| Total operating expenses | 10,078 | 9,188 | ||||||
| Loss from operations | (4,335 | ) | (4,275 | ) | ||||
| Other income (expense): | ||||||||
| Interest expense | (41 | ) | (110 | ) | ||||
| Interest income | 10 | 11 | ||||||
| Extinguishment of PPP loan | 482 | - | ||||||
| Other income (expense), net | 17 | (152 | ) | |||||
| Total other income (expense): | 468 | (251 | ) | |||||
| Net loss | (3,867 | ) | (4,526 | ) | ||||
| Less: Undeclared deemed dividend attributable to noncontrolling interest | (240 | ) | (240 | ) | ||||
| Net loss attributable to Nephros, Inc. shareholders | $ | (4,107 | ) | $ | (4,766 | ) | ||
| Net loss per common share, basic and diluted | $ | (0.41 | ) | $ | (0.52 | ) | ||
| Weighted average common shares outstanding, basic and diluted | 10,017,830 | 9,078,549 | ||||||
| Comprehensive loss: | ||||||||
| Net loss | $ | (3,867 | ) | $ | (4,526 | ) | ||
| Other comprehensive (loss) gain, foreign currency translation adjustments | (10 | ) | 9 | |||||
| Comprehensive loss | (3,877 | ) | (4,517 | ) | ||||
| Comprehensive loss attributable to noncontrolling interest | (240 | ) | (240 | ) | ||||
| Comprehensive loss attributable to Nephros, Inc. shareholders | $ | (4,117 | ) | $ | (4,757 | ) |