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CHF Solutions, Inc. Announces 80% Revenue Growth for its Fourth Quarter and Provides Company Update

EDEN PRAIRIE, Minn., Feb. 20, 2019 (GLOBE NEWSWIRE) -- CHF Solutions, Inc. (CHFS) announced today its results for the fourth quarter and year ended December 31, 2018, which included the following highlights:

  • Revenue for the fourth quarter ended December 31, 2018 increased 80.4 percent compared to the same period in 2017. Revenue growth for the year 2018 was 40.7 percent compared to the year 2017.

  • Continued marketing focus into post-cardiovascular surgery and heart failure outpatient clinics.

  • Commenced discussions with the FDA to request a label modification to include pediatrics.

  • Continued international expansion with announcement of new distributor agreements in India and Brazil.

  • Announced the filing of two new patent applications to deepen the company’s intellectual property protection of its Aquadex Flexflow® system.

  • Ended the quarter with $5.5 million in cash and cash equivalents and no debt.

“Our fourth quarter and year-end performance reflects the significant work our team accomplished during 2018. We achieved impressive revenue growth and continued to make strides in our commercialization efforts,” said John Erb, chairman and CEO of CHF Solutions. “I look forward to executing on the additional market opportunities we have identified, which we believe will deliver additional growth in 2019 and beyond.”

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 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: 4589101. 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. (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 objective is to improve the quality of life for patients with heart failure and related conditions. CHF Solutions is a Delaware corporation headquartered in Minneapolis 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, the trends in our revenue, our expansion plans to expand into the post-cardiovascular surgery market, our plans for label expansion of Aquadex FlexFlow and our future growth and developments in 2019 and beyond.  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 business strategy, the possibility that we may be unable to raise sufficient funds necessary for our anticipated operations, 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 SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Loss
 (in thousands, except per share amounts)

    Three months ended
December 31
Twelve months ended
December 31,
    2018   2017       2018 2017  
Net sales $ 1,499   $ 831   $ 4,998   $ 3,553  
Costs and Expenses:                        
Cost of goods sold   984     851     3,670     2,763  
Selling, general and administrative   3,822     2,692     15,311     10,170  
Research and development   946     479     3,053     1,481  
Goodwill and intangibles impairment       3,951         3,951  
Total costs and expenses   5,752     7,973     22,034     18,365  
Loss from operations   (4,253 )   (7,142 )   (17,036 )   (14,812 )
Other income (expense):                        
Other income, net           10     28  
Warrant valuation expense               (67 )
Change in fair value of warrant liability       5         1,475  
Total other income       5     10     1,436  
Loss before income taxes   (4,253 )   (7,137 )   (17,026 )   (13,376 )
Income tax expense   (3 )       (6 )   (6 )
Net loss $ (4,256 ) $ (7,137 ) $ (17,032 ) $ (13,382 )
                         
Basic and diluted loss per share $ (8.37 ) $ (140.07 ) $ (42.14 ) $ (525.01 )
                         
Weighted average shares outstanding – basic and diluted   509     113     404     48  
                         
Other comprehensive loss:                        
Foreign currency translation adjustment $ (2 ) $ (1 ) $ (4 ) $ (8 )
Total comprehensive loss $ (4,258 ) $ (7,138 ) $ (17,036 ) $ (13,390 )


CHF SOLUTIONS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share and per share amounts)

    December 31,
2018
    December 31,
2017
   
ASSETS              
Current assets              
Cash and cash equivalents   $ 5,480   $ 15,595    
Accounts receivable   786     545    
Inventories   1,658     1,588    
Other current assets   203     136    
Total current assets   8,127     17,864    
Property, plant and equipment, net   536     570    
Other assets   113     21    
TOTAL ASSETS $ 8,776   $ 18,455    
               
LIABILITIES AND STOCKHOLDERS’ EQUITY              
Current liabilities              
Accounts payable $ 1,133   $ 862    
Accrued compensation   1,498     1,021    
Other current liabilities   209     208    
Total current liabilities   2,840     2,091    
Other liabilities       126    
Total liabilities   2,840     2,217    
Commitments and contingencies              
               
Stockholders’ equity              
Series A junior participating preferred stock as of December 31, 2018 and December 31, 2017, par value $0.0001 per share; authorized 30,000 shares, none outstanding          
Series F convertible preferred stock as of December 31, 2018 and December 31, 2017, par value $0.0001 per share; authorized 535 and 3,780 shares, respectively, issued and outstanding 535 and 3,780, respectively              
Preferred stock as of December 31, 2018 and December 31, 2017, par value
$0.0001 per share; authorized 39,969,465 and 39,966,220 shares, respectively, none outstanding
    —       —    
Common stock as of December 31, 2018 and December 31, 2017, par value
$0.0001 per share; authorized 100,000,000 shares, issued and outstanding
513,445 and 271,357, respectively
         
Additional paid‑in capital   204,101     197,367    
Accumulated other comprehensive income:              
Foreign currency translation adjustment   1,223     1,227    
Accumulated deficit   (199,388 )   (182,356 )  
Total stockholders’ equity   5,936     16,238    
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 8,776   $ 18,455  

CHF SOLUTIONS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)

    For the years ended December 31,
    2018   2017  
Operating Activities          
Net loss   $ (17,032 ) $ (13,382 )
Adjustments to reconcile net loss to cash flows from operating activities:          
Depreciation and amortization   232   769  
Stock-based compensation expense, net   2,087   499  
Goodwill and intangibles impairment     3,951  
Change in fair value of warrant liability     (1,475 )
Warrant valuation expense     67  
Changes in assets and liabilities:          
Accounts receivable   (241 ) (263 )
Inventories   (70 ) (911 )
Other current assets   (67 ) 1  
Other assets   (14 )  
Accounts payable and accrued expenses   545   (1,176 )
Net cash used in operations   (14,560 ) (11,920 )
           
Investing activities:          
Purchase of property and equipment   (198 ) (259 )
Net cash used in investing activities   (198 ) (259 )
           
Financing activities:          
Net proceeds from public stock offerings   4,647   24,281  
Net proceeds from exercise of warrants     1,989  
Net proceeds from the sale of preferred stock, common stock and warrants     184  
Net cash provided by financing activities   4,647   26,454  
           
Effect of exchange rate changes on cash   (4 ) (3 )
Net increase (decrease) in cash and cash equivalents   (10,115 ) 14,272  
Cash and cash equivalents—beginning of period   15,595   1,323  
Cash and cash equivalents—end of period   $ 5,480   $ 15,595  
           
Supplemental schedule of non-cash activities          
  Financing fees incurred for subsequent equity financing included in other assets and accounts payable   $ 78   $  
  Warrants issued as inducement to warrant exercise   $   $ 509  
  Conversion of temporary equity to permanent equity   $   $ 485  
               
Supplemental cash flow information              
Cash paid for income taxes   $ 2   $ 6  

CONTACTS:

INVESTORS:
Claudia Napal Drayton
Chief Financial Officer
CHF Solutions, Inc.
952-345-4205
ir@chf-solutions.com

-or-
Bret Shapiro
Managing Partner
CORE IR
516-222-2560
brets@coreir.com
www.coreir.com

MEDIA
Jules Abraham
JQA Partners, Inc.
917-885-7378
jabraham@jqapartners.com