CHF Solutions, Inc. Announces 49.5 Percent Increase in Revenue for Fourth Quarter 2020 and Provides Company Update
March 02 2021 - 8:00AM
CHF Solutions, Inc. (Nasdaq: CHFS) announced today its results for
the fourth quarter ended December 31, 2020.
Recent Highlights
- Revenue for the fourth quarter of
2020 was $2 million, an increase of 49.5% compared to the prior
year period
- Gross margin was 56.1% for the
fourth quarter 2020, up from 50.8% in the corresponding period in
2019 and up from 46.1% in the third quarter of 2020
- Critical Care revenue benefited in
the quarter from increased utilization from hospitals treating
COVID-19 patients with the Aquadex System.
- Continued to see strong momentum in
pediatric accounts, adding 5 new locations including Children’s
Hospitals in Philadelphia, Houston, and the San Francisco Bay
Area
- Presented a 355 consecutive patient
retrospective study at the Annual Scientific Meeting of Heart
Failure Society of America, which showed substantial mean fluid
removal with no negative changes in renal function and reduced
rehospitalization rates in patients treated with Aquadex
therapy
- Successfully submitted CPT code
application for ultrafiltration using Aquadex SmartFlow, which will
provide access to heart failure patients in the outpatient
setting
- Cash and cash equivalents totaled
$14.4 million with no debt as of December 31, 2020
“CHF Solutions built on its momentum over the
last few quarters, having delivered solid fourth quarter results,
most notably within critical care and pediatric accounts,” said
Nestor Jaramillo, CEO of CHF Solutions. “We anticipate that when
healthcare systems return to some level of the new normal, we are
strongly positioned to see accelerating sales growth as a leading
and primary provider of ultrafiltration therapy to cardiologists,
nephrologists, hospitalists, intensivists, cardiac surgeons, and
pediatricians who treat fluid overload.”
Fourth Quarter 2020 Financial
ResultsRevenue for the fourth quarter was $2.0 million, an
increase of 49.5% compared to $1.4 million in the prior year
period. For the fifth straight quarter, the Company achieved
sequential revenue growth, with revenues in the fourth quarter
having increased 7.4% sequentially compared to the third quarter of
2020. Revenue growth in the quarter was driven by increased
utilization among established pediatric accounts, the addition of
five new pediatric accounts, and strong performance in critical
care accounts. As COVID-19 cases accelerated in the back half of
the quarter, the Company saw an increase in the number of hospitals
treating COVID-19 patients with the Aquadex SmartFlow. CHF
Solutions ended the year with a total of 14 centers using the
Aquadex SmartFlow to treat COVID-19 patients, up from three earlier
in the pandemic.
Gross margin was 56.1% for the fourth quarter
2020, up from 50.8% in the corresponding period in 2019 and up from
46.1% in the third quarter of 2020. Gross margins for the quarter
were favorably impacted by increased consumables volume and
improved manufacturing efficiencies.
Operating expenses for the fourth quarter of
2020 were $5.4 million, an increase of 5.7% as compared to the
prior year period. The increase in operating expenses was primarily
due to fully staffed sales territories and increased R&D
expenses, up 10% as compared to the prior year period in 2019.
The Company recognized a gain of $1.2 million in
the fourth quarter of 2020 related to the dissolution of a foreign
subsidiary in Australia. The gain relates to the realization of
cumulative foreign exchange adjustments previously recorded on the
balance sheet. Net loss for the fourth quarter of 2020 was $3.1
million, as compared to a loss of $4.4 million in the prior year
period in 2019.
The Company used $3.4 million of cash in the
fourth quarter of 2020 to finance operations. Cash and cash
equivalents were $14.4 million with no debt as of December 31,
2020.
Webcast and Conference Call
InformationThe 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 http://ir.chf-solutions.com/events.
Alternatively, you may access the live conference call by dialing
(877) 303-9826 (U.S.) or (224) 357-2194 (international) and using
conference ID: 5495878. An audio archive of the webcast will be
available following the call
at http://ir.chf-solutions.com/events.
About CHF Solutions CHF
Solutions, Inc. (Nasdaq: CHFS) is a medical device company
dedicated to changing the lives of patients suffering from fluid
overload through science, collaboration and innovation. The company
is focused on developing, manufacturing and commercializing the
Aquadex SmartFlow™ system for ultrafiltration therapy. CHF
Solutions is headquartered in Minneapolis, Minn., with wholly-owned
subsidiaries in Australia and Ireland. The company has been listed
on the Nasdaq Capital Market since February 2012.
About the Aquadex SmartFlow
SystemThe Aquadex SmartFlow system delivers clinically
proven therapy using a simple, flexible and smart method of
removing excess fluid from patients suffering from hypervolemia
(fluid overload). The Aquadex SmartFlow system is indicated for
temporary (up to 8 hours) or extended (longer than 8 hours in
patients who require hospitalization) use in adult and pediatric
patients weighing 20 kg or more whose fluid overload is
unresponsive to medical management, including diuretics. All
treatments must be administered by a health care provider, within
an outpatient or inpatient clinical setting, under physician
prescription, both having received training in extracorporeal
therapies.
Forward-Looking
StatementsCertain 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 value that the company brings
to its customers. 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
commercialization strategy, the impact of the COVID-19 pandemic,
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
SUBSIDIARIESCondensed Consolidated Statements of
Operations and Comprehensive Loss (In thousands, except per share
amounts)
|
|
Three months endedDecember
31, |
|
Twelve months endedDecember
31, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net sales |
|
$ |
2,044 |
|
|
$ |
1,367 |
|
|
$ |
7,441 |
|
|
$ |
5,511 |
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
897 |
|
|
|
673 |
|
|
|
3,384 |
|
|
|
2,660 |
|
Selling, general and administrative |
|
|
4,384 |
|
|
|
4,187 |
|
|
|
17,417 |
|
|
|
16,285 |
|
Research and development |
|
|
1,047 |
|
|
|
953 |
|
|
|
3,668 |
|
|
|
4,672 |
|
Total costs and expenses |
|
|
6,328 |
|
|
|
5,813 |
|
|
|
24,469 |
|
|
|
23,617 |
|
Loss from operations |
|
|
(4,284 |
) |
|
|
(4,446 |
) |
|
|
(17,028 |
) |
|
|
(18,106 |
) |
Realized foreign currency
translation gain from dissolution of subsidiary |
|
|
1,202 |
|
|
|
- |
|
|
|
1,202 |
|
|
|
- |
|
Other income (expense),
net |
|
|
(2 |
) |
|
|
1 |
|
|
|
(1 |
) |
|
|
- |
|
Loss before income taxes |
|
|
(3,084 |
) |
|
|
(4,445 |
) |
|
|
(15,827 |
) |
|
|
(18,106 |
) |
Income tax expense |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(9 |
) |
|
|
(8 |
) |
Net loss |
|
$ |
(3,086 |
) |
|
$ |
(4,448 |
) |
|
$ |
(15,836 |
) |
|
$ |
(18,114 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss
per share |
|
$ |
(1.13 |
) |
|
$ |
(33.46 |
) |
|
$ |
(10.67 |
) |
|
$ |
(278.90 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding – basic and diluted |
|
|
2,736 |
|
|
|
133 |
|
|
|
1,649 |
|
|
|
81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized foreign currency translation gain from dissolution of
subsidiary |
|
$ |
(1,202 |
) |
|
$ |
- |
|
|
$ |
(1,202 |
) |
|
$ |
- |
|
Unrealized foreign currency translation adjustments |
|
$ |
(12 |
) |
|
$ |
(5 |
) |
|
$ |
(19 |
) |
|
$ |
(9 |
) |
Total comprehensive
loss |
|
$ |
(4,300 |
) |
|
$ |
(4,453 |
) |
|
$ |
(17,057 |
) |
|
$ |
(18,123 |
) |
CHF SOLUTIONS, INC. AND
SUBSIDIARIESCondensed Consolidated Balance Sheets(In
thousands, except share and per share amounts)
|
|
December 31,2020 |
|
December 31,2019 |
ASSETS |
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
14,437 |
|
|
$ |
1,279 |
|
Accounts receivable |
|
|
905 |
|
|
|
799 |
|
Inventories |
|
|
2,957 |
|
|
|
1,797 |
|
Other current assets |
|
|
237 |
|
|
|
161 |
|
Total current
assets |
|
|
18,536 |
|
|
|
4,036 |
|
Property, plant and equipment, net |
|
|
1,200 |
|
|
|
991 |
|
Operating lease right-of-use asset, net |
|
|
255 |
|
|
|
442 |
|
Other assets |
|
|
21 |
|
|
|
133 |
|
TOTAL
ASSETS |
|
$ |
20,012 |
|
|
$ |
5,602 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Accounts payable |
|
$ |
1,097 |
|
|
$ |
1,488 |
|
Accrued compensation |
|
|
2,192 |
|
|
|
1,592 |
|
Current portion of operating lease liability |
|
|
206 |
|
|
|
186 |
|
Current portion of finance lease liability |
|
|
24 |
|
|
|
- |
|
Other current liabilities |
|
|
66 |
|
|
|
85 |
|
Total current
liabilities |
|
|
3,585 |
|
|
|
3,351 |
|
Operating lease liability |
|
|
55 |
|
|
|
261 |
|
Finance lease liability |
|
|
54 |
|
|
|
- |
|
Total
liabilities |
|
|
3,694 |
|
|
|
3,612 |
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity |
|
|
|
|
|
|
Series A junior participating
preferred stock as of December 31, 2020 and December 31, 2019, par
value $0.0001 per share; authorized 30,000 shares, none
outstanding |
|
|
— |
|
|
|
— |
|
Series F convertible preferred
stock as of December 31, 2020 and December 31, 2019, par value
$0.0001 per share; authorized 127 and 535 shares, respectively,
issued and outstanding 127 and 535 shares, respectively |
|
|
— |
|
|
|
— |
|
Preferred stock as of December
31, 2020 and December 31, 2019, par value $0.0001 per share;
authorized 39,969,873 and 39,969,465 shares, respectively, none
outstanding |
|
|
— |
|
|
|
— |
|
Common stock as of December
31, 2020 and December 31, 2019, par value $0.0001 per share;
authorized 100,000,000 shares, issued and outstanding 2,736,060 and
155,802, respectively |
|
|
— |
|
|
|
— |
|
Additional paid-in
capital |
|
|
249,663 |
|
|
|
218,278 |
|
Accumulated other
comprehensive income: |
|
|
|
|
|
|
Foreign currency translation adjustment |
|
|
(7 |
) |
|
|
1,214 |
|
Accumulated deficit |
|
|
(233,338 |
) |
|
|
(217,502 |
) |
Total stockholders’
equity |
|
|
16,318 |
|
|
|
1,990 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
$ |
20,012 |
|
|
$ |
5,602 |
|
CHF SOLUTIONS, INC. AND
SUBSIDIARIESConsolidated Statements of Cash Flows(In
thousands)
|
|
For the years endedDecember 31, |
|
|
2020 |
|
2019 |
Operating Activities |
|
|
|
|
|
|
Net loss |
|
$ |
(15,836 |
) |
|
$ |
(18,114 |
) |
Adjustments to reconcile net
loss to cash flows from operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
376 |
|
|
239 |
|
Stock-based compensation expense |
|
1,349 |
|
|
1,512 |
|
Loss on disposal of property and equipment |
|
40 |
|
|
— |
|
Realized foreign currency translation gain from dissolution of
subsidiary |
|
1,202 |
|
|
— |
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
(106 |
) |
|
(13 |
) |
Inventories |
|
(1,420 |
) |
|
(343 |
) |
Other current assets |
|
(76 |
) |
|
42 |
|
Other assets and liabilities |
|
112 |
|
|
18 |
|
Accounts payable and accrued compensation |
|
191 |
|
|
292 |
|
Net cash used in
operations |
|
(16,572 |
) |
|
(16,367 |
) |
|
|
|
|
|
|
|
Investing
activities: |
|
|
|
|
|
|
Purchase of property and equipment |
|
(298 |
) |
|
(490 |
) |
Proceeds from the sale of property and equipment |
|
31 |
|
|
— |
|
Net cash used in
investing activities |
|
(267 |
) |
|
(490 |
) |
|
|
|
|
|
|
|
Financing
activities: |
|
|
|
|
|
|
Proceeds from public stock offerings, net |
|
25,921 |
|
|
12,665 |
|
Proceeds from warrant exercises |
|
4,115 |
|
|
— |
|
Payments on finance lease liability |
|
(20 |
) |
|
— |
|
Net cash provided by
financing activities |
|
30,016 |
|
|
12,665 |
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash |
|
(19 |
) |
|
(9 |
) |
Net increase (decrease) in
cash and cash equivalents |
|
13,158 |
|
|
(4,201 |
) |
Cash and cash
equivalents—beginning of year |
|
1,279 |
|
|
5,480 |
|
Cash and cash
equivalents—end of year |
|
$ |
14,437 |
|
|
$ |
1,279 |
|
|
|
|
|
|
|
|
Supplemental schedule
of non-cash activities |
|
|
|
|
|
|
Financing fees incurred for subsequent equity financing included in
other assets and accounts payable |
|
$ |
— |
|
|
$ |
111 |
|
Inventory transferred to property, plant and equipment |
|
$ |
260 |
|
|
$ |
204 |
|
Equipment acquired through finance lease liability |
|
$ |
98 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow
information |
|
|
|
|
|
|
|
|
Cash paid for income taxes |
|
$ |
10 |
|
|
$ |
4 |
|
|
|
|
|
|
|
|
|
|
CONTACTS:
INVESTORS:
Claudia Napal Drayton
Chief Financial Officer
CHF Solutions, Inc.
952-345-4205
ir@chf-solutions.com
Matt Bacso, CFA
Gilmartin Group LLC
Matt.bacso@gilmartinir.com
MEDIA:
Jessica Stebing
Health+Commerce
260-336-6202
jstebing@healthandcommerce.com
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