Full Press Release Details
CHF Solutions, Inc. Announces 11.4 Percent Revenue Growth for its Fourth Quarter and Provides Company Update
Eden Prairie, MN: March 20, 2018: (GLOBE NEWSWIRE) CHF Solutions, Inc. (Nasdaq: CHFS) announced today its results for the fourth quarter and year ended December 31, 2017, which included the following highlights:
"We are pleased with our fourth quarter and year performance, as we achieved double-digit revenue growth over 2016," said John Erb, CEO of CHF Solutions. "I'm particularly proud with the execution of our business plan that drove the last quarter of the year, setting us up for continued progress into 2018. We are committed to increasing our footprint in the market, and the hiring of sales staff as well as the expansion of our international distribution channels, will go a long way toward that goal."
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 or access the webcast directly at https://edge.media-server.com/m6/p/dxgvnn8x. Alternatively, investors may access the live conference call by dialing (877) 303-9826 (U.S.) or (224) 357-2194 (international) and using conference ID 9684909. An audio archive of the webcast and the call script will be available following the call on the Investor page at www.chf-solutions.com.
CHF SOLUTIONS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except per share amounts)
| Three months ended December 31 | Twelve months ended December 31, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Net sales | $ | 831 | $ | 746 | $ | 3,553 | $ | 1,289 | ||||||||
| Costs and Expenses: | ||||||||||||||||
| Cost of goods sold | 851 | 526 | 2,763 | 713 | ||||||||||||
| Selling, general and administrative | 2,692 | 2,685 | 10,170 | 8,129 | ||||||||||||
| Research and development | 479 | 598 | 1,481 | 8,109 | ||||||||||||
| Goodwill and intangibles impairment | 3,951 | - | 3,951 | - | ||||||||||||
| Total costs and expenses | 7,973 | 3,809 | 18,365 | 16,951 | ||||||||||||
| Loss from operations | (7,142 | ) | (3,063 | ) | (14,812 | ) | (15,662 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense | - | - | - | (504 | ) | |||||||||||
| Loss on early retirement of long-term debt | - | - | - | (500 | ) | |||||||||||
| Other income (expense), net | - | - | 28 | 2 | ||||||||||||
| Warrant valuation expense | - | - | (67 | ) | - | |||||||||||
| Change in fair value of warrant liability | 5 | 172 | 1,475 | 818 | ||||||||||||
| Total other income (expense) | 5 | 172 | 1,436 | (184 | ) | |||||||||||
| Loss before income taxes | (7,137 | ) | (2,891 | ) | (13,376 | ) | (15,846 | ) | ||||||||
| Income tax (expense) benefit, net | - | (10 | ) | (6 | ) | 54 | ||||||||||
| Net loss | $ | (7,137 | ) | $ | (2,901 | ) | $ | (13,382 | ) | $ | (15,792 | ) | ||||
| Basic and diluted loss per share | $ | (10.00 | ) | $ | (133.36 | ) | $ | (37.51 | ) | $ | (536.12 | ) | ||||
| Weighted average shares outstanding - basic and diluted | 1,587 | 36 | 665 | 33 | ||||||||||||
| Other comprehensive income: | ||||||||||||||||
| Foreign currency translation adjustment | $ | (1 | ) | $ | 1 | $ | (8 | ) | $ | (11 | ) | |||||
| Total comprehensive loss | $ | (7,138 | ) | $ | (2,900 | ) | $ | (13,390 | ) | $ | (15,803 | ) |
CHF SOLUTIONS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
| December 31, 2017 | December 31, 2016 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 15,595 | $ | 1,323 | ||||
| Accounts receivable | 545 | 282 | ||||||
| Inventories | 1,588 | 677 | ||||||
| Other current assets | 136 | 137 | ||||||
| Total current assets | 17,864 | 2,419 | ||||||
| Property, plant and equipment, net | 570 | 540 | ||||||
| Intangible assets, net | - | 4,302 | ||||||
| Goodwill | - | 189 | ||||||
| Other assets | 21 | 21 | ||||||
| TOTAL ASSETS | $ | 18,455 | $ | 7,471 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 862 | $ | 1,987 | ||||
| Accrued compensation | 1,021 | 909 | ||||||
| Other current liabilities | 208 | 364 | ||||||
| Total current liabilities | 2,091 | 3,260 | ||||||
| Common stock warrant liability | - | 1,843 | ||||||
| Other liabilities | 126 | 126 | ||||||
| Total liabilities | 2,217 | 5,229 | ||||||
| Commitments and contingencies | - | - | ||||||
| Temporary Stockholders' Equity | ||||||||
| Series D convertible preferred stock as of December 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 0 and 900 shares, respectively, issued and outstanding 0 and 700, respectively | - | 485 | ||||||
| Stockholders' equity | ||||||||
| Series A junior participating preferred stock as of December 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 30,000 shares, none outstanding | - | - | ||||||
| Series B-1 convertible preferred stock as of December 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 0 and 1,824.4 shares, respectively, issued and outstanding 0 and 1,824.4, respectively | - | - | ||||||
| Series C convertible preferred stock as of December 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 0 and 2,900 shares, respectively, issued and outstanding 0 and 2,900, respectively | - | - | ||||||
| Series F convertible preferred stock as of December 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 3,780 and 0 shares, respectively, issued and outstanding 3,780 and 0, respectively | ||||||||
| Preferred stock as of December 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 39,966,220 and 39,964,375.6 shares, respectively, none outstanding | - | - | ||||||
| Common stock as of December 31, 2017 and December 31, 2016, par value $0.0001 per share; authorized 100,000,000 shares, issued and outstanding 3,798,929 and 38,862, respectively | - | - | ||||||
| Additional paid in capital | 197,367 | 169,496 | ||||||
| Accumulated other comprehensive income: | ||||||||
| Foreign currency translation adjustment | 1,227 | 1,235 | ||||||
| Accumulated deficit | (182,356 | ) | (168,974 | ) | ||||
| Total stockholders' equity | 16,238 | 1,757 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 18,455 | $ | 7,471 |
CHF SOLUTIONS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
| For the years ended December 31, | ||||||||
| In thousands | 2017 | 2016 | ||||||
| Operating Activities | ||||||||
| Net loss | $ | (13,382 | ) | $ | (15,792 | ) | ||
| Adjustments to reconcile net loss to cash flows from operating activities: | ||||||||
| Depreciation and amortization | 769 | 697 | ||||||
| Stock based compensation expense, net | 499 | 949 | ||||||
| Amortization of debt discount and financing fees | - | 187 | ||||||
| Goodwill and intangibles impairment | 3,951 | - | ||||||
| Loss on retirement of long-term debt | - | 500 | ||||||
| Change in fair value of warrant liability | (1,475 | ) | (818 | ) | ||||
| Warrant valuation expense | 67 | - | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (263 | ) | (282 | ) | ||||
| Inventory | (911 | ) | (677 | ) | ||||
| Other current assets | 1 | 342 | ||||||
| Other assets and liabilities | - | (464 | ) | |||||
| Accounts payable and accrued expenses | (1,176 | ) | (934 | ) | ||||
| Net cash used in operations | (11,920 | ) | (16,292 | ) | ||||
| Investing activities: | ||||||||
| Purchase of property and equipment | (259 | ) | (117 | ) | ||||
| Purchase of Aquadex product line | - | (4,000 | ) | |||||
| Net cash used in investing activities | (259 | ) | (4,117 | ) | ||||
| Financing activities: | ||||||||
| Net proceeds from public stock offering | 24,281 | - | ||||||
| Net proceeds from exercise of warrants | 1,989 | - | ||||||
| Net proceeds from the sale of preferred stock, common stock and warrants | 184 | 6,636 | ||||||
| Repayments of long-term debt | - | (8,000 | ) | |||||
| Net cash provided by (used in) financing activities | 26,454 | (1,364 | ) | |||||
| Effect of exchange rate changes on cash | (3 | ) | (17 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 14,272 | (21,790 | ) | |||||
| Cash and cash equivalents-beginning of period | 1,323 | 23,113 | ||||||
| Cash and cash equivalents-end of period | $ | 15,595 | $ | 1,323 | ||||
| Supplemental schedule of non-cash activities | ||||||||
| Warrants issued as inducement to warrant exercise | $ | 509 | $ | - | ||||
| Conversion of temporary equity to permanent equity | $ | 485 | $ | - | ||||
| Common stock issued for business acquisition | $ | - | $ | 950 | ||||
| Supplemental cash flow information | ||||||||
| Interest paid on debt borrowings | $ | - | $ | 840 | ||||
| Cash paid for income taxes | $ | 6 | $ | 47 |
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 mission is to predict, measure, and control patient fluid balance through science, collaboration, and innovative medical technology. CHF Solutions is a Delaware corporation headquartered in Minneapolis, Minnesota 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, statements regarding the impact of hiring sales staff and expansion of our distribution channels. 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 recently announced strategic realignment, 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.
Claudia Napal Drayton
Chief Financial Officer