Full Press Release Details
Announces Results for Quarter Ended June 30, 2022
Quarter Net Revenue of $2.9 Million, a 27% Year-Over-Year Increase;
Customer Sites Climb 21% to New Record
ORANGE, NJ, August 10, 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 second quarter ended June
Filtration Business Segment Highlights*
| Net revenue of $2.8 million, an increase of 30% | ||
| Net loss of $0.6 million, compared to $0.9 million | ||
| Adjusted EBITDA of ($0.2 million), compared with ($0.5 million) |
| Net revenue of $2.9 million, an increase of 27% | ||
| Net loss of $1.1 million, compared to $1.1 million | ||
| Adjusted EBITDA of ($0.7 million), compared to ($0.8 million) |
performance is relative to same period prior year (second quarter of 2021)
are pleased to report strong revenue growth, up 27% year-over-year, and 32% compared to the first quarter of 2022," said Andy Astor,
President and Chief Executive Officer. "Further, our Active Customer Sites (ACS) rose to a new high of 1,349, representing increases
of 21% year-over-year and 6% from the first quarter of 2022. We believe ACS is an important leading indicator of future revenue growth."
Astor, continued, "While this quarter's results were improved, our results in the prior quarter made clear the need to re-evaluate
our cost structure. During the quarter, we took several actions, including price increases to cover inflation and increased supply chain
costs, headcount and professional services reductions, optimized production operations, and reduced product SKUs. Each of these actions
was taken with intent to achieve positive cash flow by mid-2023."
Financial Performance for the Quarter Ended June 30, 2022
revenue for the quarter ended June 30, 2022 was $2.9 million, compared to $2.3 million in the corresponding period in 2021, an increase
loss was $1.1 million for each of the quarters ended June 30, 2022 and 2021.
EBITDA for the quarter ended June 30, 2022 was ($0.7 million), compared to ($0.8 million) during the same period in 2021.
of goods sold for the quarter ended June 30, 2022 was $1.5 million, compared with $1.0 million for the quarter ended June 30, 2021, an
increase of 54%. Gross margins for the quarter ended June 30, 2022 were 47%, compared with 56% in the same period in 2021.
and development expenses for the quarter ended June 30, 2022 were $0.4 million, compared with $0.5 million during the quarter ended June
and amortization expenses for the quarter ended June 30, 2022 were approximately $64,000, compared with approximately $51,000 for the
corresponding period 2021.
general and administrative expenses for the quarter ended June 30, 2022 were $2.1 million, compared with $1.9 million during the same
period in 2021, an increase of 12%.
of June 30, 2022, Nephros had cash and cash equivalents of $4.2 million on a consolidated basis.
EBITDA Definition and Reconciliation to GAAP Financial Measures
EBITDA is calculated by taking net loss calculated in accordance with generally accepted accounting principles ("GAAP") and
excluding all interest-related expenses and income, tax-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 Adjusted EBITDA
to net loss, the most directly comparable GAAP financial measure, for the second quarter of the 2022 and 2021 fiscal years for both Nephros
(on a consolidated basis) and the Water Filtration Business Segment:
| 3 Months Ended Jun 30, | ||||||||
| Water Filtration Business Segment | 2022 | 2021 | ||||||
| (in thousands) | ||||||||
| Net loss | $ | (573 | ) | $ | (863 | ) | ||
| Adjustments: | ||||||||
| Depreciation of property and equipment | 36 | 7 | ||||||
| Amortization of other assets | 68 | 48 | ||||||
| Interest expense | 6 | 11 | ||||||
| Interest income | (1 | ) | (3 | ) | ||||
| Stock based compensation | 240 | 269 | ||||||
| Other noncash items | 21 | 24 | ||||||
| Adjusted EBITDA | $ | (203 | ) | $ | (507 | ) |
| 3 Months Ended Jun 30, | ||||||||
| Consolidated Results | 2022 | 2021 | ||||||
| (in thousands) | ||||||||
| Net loss | $ | (1,137 | ) | $ | (1,126 | ) | ||
| Adjustments: | ||||||||
| Depreciation of property and equipment | 36 | 7 | ||||||
| Amortization of other assets | 68 | 48 | ||||||
| Interest expense | 6 | 11 | ||||||
| Interest income | (1 | ) | (3 | ) | ||||
| Stock based compensation | 277 | 281 | ||||||
| Other noncash items | 21 | 24 | ||||||
| Adjusted EBITDA | $ | (730 | ) | $ | (758 | ) |
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 ET
will host a conference call today at 4:30pm Eastern Time, during which management will discuss Nephros's financial results and
provide a general business overview.
may dial into the call as follows:
access: 1 (844) 808-7106
access: 1 (412) 317-5285
joining, please ask to be joined into the Nephros conference call.
replay of the call can be accessed until August 17th, 2022 at 1 (877) 344-7529 or 1 (412) 317-0088 for international callers and entering
replay access code: 6487830.
audio archive of the call will be available shortly after the call on the Nephros Investor Relations page.
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.
more information about Nephros, please visit nephros.com.
release contains forward-looking statements that are subject to various risks and uncertainties. Such statements include statements regarding
Nephros's expected future revenue, its belief that Active Customer Sites are a leading indicator of revenue growth, expectations
on achieving positive cash flow and the timing thereof and other future financial performance, 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, inflationary
factors and general economic conditions, changes in business and competitive conditions, the availability of capital when needed, dependence
on third-party manufacturers and researchers, regulatory reforms, and uncertainties in litigation or investigative proceedings. These
and other risks and uncertainties are detailed in Nephros's reports filed with the U.S. Securities and Exchange Commission, including
its Annual Report on Form 10-K for the year ended December 31, 2021, which it may update in Part II, Item 1A - Risk Factors in
its Quarterly Reports on Form 10-Q that it has filed or will file hereafter. Nephros does not undertake any responsibility to update
the forward-looking statements in this release.
INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
thousands, except share and per share amounts)
| June 30, 2022 | December 31, 2021 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 4,179 | $ | 6,973 | ||||
| Accounts receivable, net | 2,128 | 1,641 | ||||||
| Inventory | 4,664 | 4,795 | ||||||
| Prepaid expenses and other current assets | 151 | 225 | ||||||
| Total current assets | 11,122 | 13,634 | ||||||
| Property and equipment, net | 450 | 366 | ||||||
| Lease right-use-of assets | 626 | 730 | ||||||
| Intangible assets, net | 1,460 | 1,536 | ||||||
| Goodwill | 759 | 759 | ||||||
| License and supply agreement, net | 469 | 536 | ||||||
| Other assets | 67 | 89 | ||||||
| TOTAL ASSETS | $ | 14,953 | $ | 17,650 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Current portion of secured note payable | 210 | 248 | ||||||
| Accounts payable | 1,411 | 1,334 | ||||||
| Accrued expenses | 185 | 444 | ||||||
| Current portion of lease liabilities | 305 | 364 | ||||||
| Total current liabilities | 2,111 | 2,390 | ||||||
| Secured note payable, long term portion | - | 95 | ||||||
| Equipment financing, net of current portion | 3 | 4 | ||||||
| Lease liabilities, net of current portion | 358 | 412 | ||||||
| TOTAL LIABILITIES | 2,472 | 2,901 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Preferred stock, $.001 par value; 5,000,000 shares authorized at June 30, 2022 and December 31, 2021; no shares issued and outstanding June 30, 2022 and December 31, 2021. | - | - | ||||||
| Common stock, $.001 par value; 40,000,000 shares authorized at June 30, 2022 and December 31, 2021; 10,318,818 and 10,258,444 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively | 10 | 10 | ||||||
| Additional paid-in capital | 148,040 | 147,346 | ||||||
| Accumulated other comprehensive income | - | 64 | ||||||
| Accumulated deficit | (138,829 | ) | (135,725 | ) | ||||
| Subtotal | 9,221 | 11,695 | ||||||
| Noncontrolling interest | 3,260 | 3,054 | ||||||
| TOTAL STOCKHOLDERS' EQUITY | 12,481 | 14,749 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 14,953 | $ | 17,650 |
INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
thousands, except share and per share amounts)
| Three Months Ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| Net revenue: | ||||||||
| Product revenues | $ | 2,839 | $ | 2,196 | ||||
| Royalty and other revenues | 45 | 70 | ||||||
| Total net revenues | 2,884 | 2,266 | ||||||
| Cost of goods sold | 1,523 | 991 | ||||||
| Gross margin | 1,361 | 1,275 | ||||||
| Operating expenses: | ||||||||
| Research and development | 431 | 487 | ||||||
| Depreciation and amortization | 64 | 51 | ||||||
| Selling, general and administrative | 2,070 | 1,854 | ||||||
| Total operating expenses | 2,565 | 2,392 | ||||||
| Loss from operations | (1,204 | ) | (1,117 | ) | ||||
| Other income (expense): | ||||||||
| Interest expense | (6 | ) | (11 | ) | ||||
| Interest income | 1 | 3 | ||||||
| Extinguishment of PPP Loan | - | - | ||||||
| Other income (expense), net | 72 | (1 | ) | |||||
| Total other income (expense): | 67 | (9 | ) | |||||
| Net loss | (1,137 | ) | (1,126 | ) | ||||
| Less: Deemed dividend attributable to noncontrolling interest | (66 | ) | (60 | ) | ||||
| Net loss attributable to Nephros Inc | (1,203 | ) | (1,186 | ) | ||||
| Net loss per common share, basic and diluted | $ | (0.12 | ) | $ | (0.12 | ) | ||
| Weighted average common shares outstanding, basic and diluted | 10,299,148 | 9,943,026 | ||||||
| Comprehensive loss: | ||||||||
| Net Loss | (1,137 | ) | (1,126 | ) | ||||
| Other comprehensive income(loss), foreign currency translation adjustments, net of tax | - | 2 | ||||||
| Comprehensive loss | (1,137 | ) | (1,124 | ) | ||||
| Comprehensive loss attirbutable to noncontrolling interest | (66 | ) | (60 | ) | ||||
| Comprehensive loss attributable to Nephros, Inc. shareholders | $ | (1,203 | ) | $ | (1,184 | ) |