Nuwellis, Inc. Announces Second Quarter 2022 Financial Results
August 09 2022 - 7:00AM
Nuwellis, Inc. (Nasdaq: NUWE) announced today its results for the
second quarter ended June 30, 2022, which included the following
highlights:
- Generated $2.2 million in total
revenue for the second quarter 2022, up 15% sequentially from the
first quarter of 2022,
- Enrolled first patient in
REVERSE-HF, a randomized controlled multi-center clinical trial
designed to validate clinical outcomes and the economic value of
Aquadex therapy, and
- Decreased operating expenses 14%
compared to the second quarter of 2021 to minimize cash utilization
while continuing to fund key strategic initiatives.
“I am very happy with our strong sequential
performance in the quarter and remain encouraged by our
considerable progress in executing our strategy to make the Aquadex
System the standard of care for diuretic resistant patients needing
fluid balance in the ICU or because of suffering from heart
failure,” said Nestor Jaramillo, CEO of Nuwellis. “This includes
securing reimbursement for outpatient ultrafiltration therapy,
initiating a key pivotal trial, and making strategic enhancements
to our product portfolio. We believe these key initiatives position
Nuwellis favorably as we look to the back half of 2022 and enter
2023. These results represent the second consecutive quarter where
we have reported strong double-digit sequential sales growth,
suggesting that the Aquadex System is gaining traction in key
academic institutions across the country.”
Second Quarter 2022 Financial
Results
Total revenue for the second quarter of 2022 was
$2.2 million, an increase of 15% compared to the first quarter of
2022 and a reduction of 12% compared to the prior-year period.
Sequential revenue growth in the quarter was driven primarily by
strong growth in the Pediatric and Critical Care segments, fueled
by higher console sales and increased utilization in certain key
accounts.
Gross margin was 48.0% for the second quarter of
2022, compared to 60.2% in the prior-year period. The decline in
gross margin compared to the second quarter of 2021 was primarily
due to lower fixed overhead absorption, along with a $0.1 million
non-cash inventory write-off resulting from the discontinuation of
a distribution agreement, partly offset by favorable pricing. Pro
forma gross margin would have been 53.1% excluding the one-time
inventory charge.
Selling, general and administrative expenses for
the second quarter of 2022 were $4.3 million, compared to $5.1
million in the prior-year period. This reduction resulted from
continued expense vigilance and certain non-recurring
administrative costs in the prior-year period.
Second-quarter research and development expenses
were $1.1 million dollars, compared to $1.2 million dollars in the
second quarter of 2021, while we continue to advance new product
development initiatives.
The net loss for the second quarter of 2022 was
$4.3 million, compared to a net loss of $4.7 million in the
prior-year period.
Cash and cash equivalents were approximately
$15.3 million as of June 30, 2022.
Webcast and Conference Call
Information
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.
Investors interested in listening to the
conference call may do so by following one of the below links:
- Webcast link for interested
listeners:
- https://edge.media-server.com/mmc/p/frxpm437
- Dial-in registration for sell-side research analysts:
-
https://register.vevent.com/register/BIea28b3e149034b04b99b65da059db74a
An audio archive of the webcast will be
available following the call on the Investors page at
https://ir.nuwellis.com.
About NuwellisNuwellis,
Inc. (Nasdaq: NUWE) is a medical device company dedicated to
transforming 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. Nuwellis is
headquartered in Minneapolis, MN, with a wholly owned subsidiary in
Ireland.
About the Aquadex SmartFlow
System The 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 new market opportunities and
anticipated growth in 2022 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 risks 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. Nuwellis 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.
FINANCIAL STATEMENTS
NUWELLIS, INC. AND SUBSIDIARYCondensed
Consolidated Balance Sheets(In thousands, except share and
per share amounts) |
|
|
|
June 30,2022 |
|
December 31,2021 |
ASSETS |
|
|
(unaudited) |
|
|
|
Current
assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
15,345 |
|
|
$ |
24,205 |
|
Accounts receivable |
|
|
1,313 |
|
|
|
750 |
|
Inventories |
|
|
3,010 |
|
|
|
2,843 |
|
Other current assets |
|
|
252 |
|
|
|
328 |
|
Total current
assets |
|
|
19,920 |
|
|
|
28,126 |
|
Property, plant and equipment, net |
|
|
1,063 |
|
|
|
1,188 |
|
Operating lease right-of-use asset |
|
|
994 |
|
|
|
1,082 |
|
Other assets |
|
|
21 |
|
|
|
21 |
|
TOTAL
ASSETS |
|
$ |
21,998 |
|
|
$ |
30,417 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Accounts payable |
|
$ |
1,550 |
|
|
$ |
1,414 |
|
Accrued compensation |
|
|
1,633 |
|
|
|
1,664 |
|
Current portion of operating lease liability |
|
|
186 |
|
|
|
167 |
|
Current portion of finance lease liability |
|
|
27 |
|
|
|
26 |
|
Other current liabilities |
|
|
63 |
|
|
|
36 |
|
Total current
liabilities |
|
|
3,459 |
|
|
|
3,307 |
|
Operating lease liability |
|
|
860 |
|
|
|
956 |
|
Finance lease liability |
|
|
15 |
|
|
|
28 |
|
Other long-term liability |
|
|
— |
|
|
|
179 |
|
Total
liabilities |
|
|
4,334 |
|
|
|
4,470 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity |
|
|
|
|
|
|
Series A junior participating
preferred stock as of June 30, 2022 and December 31, 2021, par
value $0.0001 per share; authorized 30,000 shares, none
outstanding |
|
|
— |
|
|
|
— |
|
Series F convertible preferred
stock as of both June 30, 2022 and December 31, 2021, par value
$0.0001 per share; authorized 127 shares, issued and outstanding
127 shares |
|
|
— |
|
|
|
— |
|
Preferred stock as of both
June 30, 2022 and December 31, 2021, par value $0.0001 per share;
authorized 39,969,873 shares, none outstanding |
|
|
— |
|
|
|
— |
|
Common stock as of June 30,
2022 and December 31, 2021, par value $0.0001 per share; authorized
100,000,000 shares, issued and outstanding 10,537,606 shares |
|
|
1 |
|
|
|
1 |
|
Additional paid-in
capital |
|
|
279,350 |
|
|
|
278,873 |
|
Accumulated other
comprehensive income: |
|
|
|
|
|
|
Foreign currency translation adjustment |
|
|
(12 |
) |
|
|
(11 |
) |
Accumulated deficit |
|
|
(261,675 |
) |
|
|
(252,916 |
) |
Total stockholders’
equity |
|
|
17,664 |
|
|
|
25,947 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
$ |
21,998 |
|
|
$ |
30,417 |
|
NUWELLIS, INC. AND SUBSIDIARYCondensed
Consolidated Statements of Operations and Comprehensive
Loss(Unaudited)(In thousands, except per
share amounts) |
|
|
|
Three months endedJune 30, |
|
Six months endedJune 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Net sales |
|
$ |
2,213 |
|
|
$ |
2,508 |
|
|
$ |
4,139 |
|
|
$ |
4,426 |
|
Cost of goods sold |
|
|
1,150 |
|
|
|
997 |
|
|
|
1,974 |
|
|
|
1,949 |
|
Gross profit |
|
|
1,063 |
|
|
|
1,511 |
|
|
|
2,165 |
|
|
|
2,477 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
4,257 |
|
|
|
5,063 |
|
|
|
8,669 |
|
|
|
10,300 |
|
Research and development |
|
|
1,107 |
|
|
|
1,174 |
|
|
|
2,213 |
|
|
|
2,121 |
|
Total operating expenses |
|
|
5,364 |
|
|
|
6,237 |
|
|
|
10,882 |
|
|
|
12,421 |
|
Loss from operations |
|
|
(4,301 |
) |
|
|
(4,726 |
) |
|
|
(8,717 |
) |
|
|
(9,944 |
) |
Other income (expense), net |
|
|
17 |
|
|
|
(2 |
) |
|
|
(38 |
) |
|
|
(3 |
) |
Loss before income taxes |
|
|
(4,284 |
) |
|
|
(4,728 |
) |
|
|
(8,755 |
) |
|
|
(9,947 |
) |
Income tax expense |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
(4 |
) |
|
|
(5 |
) |
Net loss |
|
$ |
(4,286 |
) |
|
$ |
(4,731 |
) |
|
$ |
(8,759 |
) |
|
$ |
(9,952 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss
per share |
|
$ |
(0.41 |
) |
|
$ |
(0.72 |
) |
|
$ |
(0.83 |
) |
|
$ |
(2.04 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding – basic and diluted |
|
|
10,538 |
|
|
|
6,532 |
|
|
|
10,538 |
|
|
|
4,887 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
$ |
1 |
|
|
$ |
— |
|
|
$ |
(1 |
) |
|
$ |
(3 |
) |
Total comprehensive
loss |
|
$ |
(4,285 |
) |
|
$ |
(4,731 |
) |
|
$ |
(8,760 |
) |
|
$ |
(9,955 |
) |
NUWELLIS, INC. AND SUBSIDIARYCondensed
Consolidated Statements of Cash
Flows(Unaudited)(in thousands) |
|
|
|
|
Six months endedJune 30, |
|
|
2022 |
|
2021 |
Operating Activities: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(8,759 |
) |
|
$ |
(9,952 |
) |
Adjustments to reconcile net
loss to cash flows used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
206 |
|
|
|
256 |
|
Stock-based compensation expense, net |
|
|
477 |
|
|
|
736 |
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(563 |
) |
|
|
(272 |
) |
Inventory |
|
|
(167 |
) |
|
|
122 |
|
Other current assets |
|
|
76 |
|
|
|
(176 |
) |
Other assets and liabilities |
|
|
(152 |
) |
|
|
9 |
|
Accounts payable and accrued expenses |
|
|
117 |
|
|
|
75 |
|
Net cash used in
operating activities |
|
|
(8,765 |
) |
|
|
(9,202 |
) |
|
|
|
|
|
|
|
|
|
Investing
Activities: |
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(81 |
) |
|
|
(137 |
) |
Net cash used in
investing activities |
|
|
(81 |
) |
|
|
(137 |
) |
|
|
|
|
|
|
|
|
|
Financing
Activities: |
|
|
|
|
|
|
|
|
Proceeds from public stock offerings, net |
|
|
— |
|
|
|
18,896 |
|
Proceeds from warrant exercises |
|
|
— |
|
|
|
1 |
|
Payments on finance lease liability |
|
|
(13 |
) |
|
|
(14 |
) |
Net cash provided
(used in) by financing activities |
|
|
(13 |
) |
|
|
18,883 |
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash |
|
|
(1 |
) |
|
|
(3 |
) |
Net increase (decrease) in
cash and cash equivalents |
|
|
(8,860 |
) |
|
|
9,541 |
|
Cash and cash equivalents -
beginning of period |
|
|
24,205 |
|
|
|
14,437 |
|
Cash and cash
equivalents - end of period |
|
$ |
15,345 |
|
|
$ |
23,978 |
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow
information |
|
|
|
|
|
|
|
|
Inventory transferred to property, plant and equipment |
|
$ |
— |
|
|
$ |
179 |
|
|
|
|
|
|
|
|
|
|
INVESTOR CONTACTS:
George Montague, CFAChief Financial Officer, Nuwellis, Inc.
ir@nuwellis.com
Matt Bacso, CFAGilmartin Group Matt.Bacso@gilmartinir.com
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