Nuwellis, Inc. Announces Third Quarter 2021 Financial Results
10 November 2021 - 12:00AM
Nuwellis, Inc. (Nasdaq: NUWE) announced today its results for the
third quarter ended September 30, 2021, which included the
following highlights:
- Generated $1.9 million in total revenue, representing a decline
of 3% compared to the prior-year period
- Generated $6.3 million in total revenue year-to-date through
September 30, representing 16% growth compared to the prior-year
period and a 52% increase above the comparable pre-pandemic period
in 2019
- Opened three new pediatric accounts in the third quarter, the
largest quarterly addition in 2021
- Announced R&D partnership with Koronis Biomedical
Technologies Corporation (KBT) to design and develop a product for
children under 20kg with limited kidney function, following a $1.7
million development grant from the National Institutes of
Health
- Completed an all-common stock capital raise of $10.0 million
gross proceeds, ending the quarter with $28.4 million in cash and
no debt
“Although the third quarter was a challenging environment due to
COVID headwinds, we were able to continue adding new pediatric
customers and drive increased utilization within our Critical Care
business at key accounts,” said Nestor Jaramillo, CEO of Nuwellis.
“Similar to previous cycles where COVID cases drop following spikes
in geographic hot spots, we believe we will be able execute our
operating plan and accelerate revenue growth in our key markets
when the healthcare environment normalizes.”
Third Quarter 2021 Financial ResultsRevenue for
the third quarter of 2021 was $1.9 million, representing a decline
of 3% compared to the prior-year period. This revenue decline was
driven primarily by the cancellation of elective procedures and the
change in protocol to minimize use of fluid resuscitation when
treating critically ill COVID patients.
- Critical Care revenue more than doubled compared to the
prior-year period but declined sequentially due to COVID headwinds.
The Company continues to see strong utilization from key accounts
that rely heavily on the Aquadex System to treat non-COVID
critically ill patients.
- Pediatric revenue declined compared to the prior-year period
due to a more difficult hospital operating environment. The Company
opened three new pediatric accounts in the third quarter, its
largest quarterly addition in 2021, a strong sign of the interest
to use the therapy among pediatric institutions.
- Heart Failure revenue increased compared to the prior year
period but declined sequentially due a spike in COVID cases which
negatively impacted patient behavior and access to hospitals.
Gross margin was 60.4% for the third quarter 2021, compared to
46.1% in the prior year period. The increase in gross margin was
primarily due to favorable geographic and product mix.
Selling, general and administrative (“SG&A”) expenses for
the third quarter of 2021 were $4.6 million, an increase of 9%
compared to the prior-year period. The increase in SG&A was
primarily due to our continued investment in sales and marketing
activities, plus additional administrative costs. Research and
development (“R&D”) expenses in the third quarter of 2021 were
$1.7 million, an increase of 98% compared to the prior year period.
The increase in R&D expenses was driven primarily by
investments in new products, namely the new pediatric system, along
with increased spending on clinical evidence, regulatory and
reimbursement activity.
The net loss for the third quarter of 2021 was $5.3 million,
compared to a net loss of $4.3 million in the prior year period
reflecting the new investments made this year in product
development and clinical evidence, as mentioned above.
Cash and cash equivalents were approximately $28.4 million as of
September 30, 2021. During the third quarter of 2021, the Company
completed an all-common stock capital raise of $10.0 million in
gross proceeds.
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.nuwellis.com. Alternatively, you may access the live
conference call by dialing (877) 303-9826 (U.S.) or (224) 357-2194
(international) and using conference ID: 1436426. An audio archive
of the webcast will be available following the call at
http://ir.nuwellis.com.
About Nuwellis
Nuwellis, 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 2021 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 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 Statements of
Operations and Comprehensive Loss (unaudited, in
thousands, except per share amounts)
|
|
Three months endedSeptember
30, |
Nine months endedSeptember
30, |
|
|
|
|
2021 |
|
|
2020 |
|
|
|
2021 |
2020 |
|
Net sales |
$ |
1,853 |
|
|
$ |
1,904 |
|
|
$ |
6,279 |
|
|
$ |
5,397 |
|
|
Cost of goods sold |
|
733 |
|
|
|
1,026 |
|
|
|
2,682 |
|
|
|
2,486 |
|
|
Gross profit |
|
1,120 |
|
|
|
878 |
|
|
|
3,597 |
|
|
|
2,911 |
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
4,645 |
|
|
|
4,264 |
|
|
|
14,945 |
|
|
|
13,034 |
|
|
Research and development |
|
1,726 |
|
|
|
871 |
|
|
|
3,847 |
|
|
|
2,620 |
|
|
Total operating expenses |
|
6,371 |
|
|
|
5,135 |
|
|
|
18,792 |
|
|
|
15,654 |
|
|
Loss from operations |
|
(5,251 |
) |
|
|
(4,257 |
) |
|
|
(15,195) |
|
(12,743 |
) |
|
|
Other income (expense), net |
|
(19 |
) |
|
|
— |
|
|
|
(22 |
) |
|
|
— |
|
|
|
Loss before income taxes |
|
(5,270 |
) |
|
|
(4,257 |
) |
|
|
(15,217 |
) |
|
|
(12,743 |
) |
|
|
Income tax expense |
|
(2 |
) |
|
|
(3 |
) |
|
|
(7 |
) |
|
|
(7 |
) |
|
|
Net loss |
$ |
(5,272 |
) |
|
$ |
(4,260 |
) |
|
$ |
(15,224 |
) |
|
$ |
(12,750 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss
per share |
$ |
(0.75) |
|
$ |
(2.08 |
) |
|
$ |
(2.72 |
) |
|
$ |
(11.27 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding – basic and diluted |
|
7,098 |
|
|
|
2,049 |
|
|
|
5,624 |
|
|
|
1,287 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss: |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
$ |
— |
|
|
$ |
(7 |
) |
|
$ |
(3 |
) |
|
$ |
(12 |
) |
|
Total comprehensive
loss |
$ |
(5,272 |
) |
|
$ |
(4,267 |
) |
|
$ |
(15,227 |
) |
|
$ |
(12,762 |
) |
|
NUWELLIS, INC. AND
SUBSIDIARYCondensed Consolidated Balance
Sheets(in thousands, except share and per share
amounts)
|
|
September 30, 2021 |
|
|
December 31, 2020 |
|
ASSETS |
|
(unaudited) |
|
|
|
|
Current
assets |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
28,431 |
|
|
$ |
14,437 |
|
|
Accounts receivable |
|
1,069 |
|
|
|
905 |
|
|
Inventories |
|
2,805 |
|
|
|
2,957 |
|
|
Other current assets |
|
420 |
|
|
|
237 |
|
|
Total current
assets |
|
32,725 |
|
|
|
18,536 |
|
|
Property, plant and equipment, net |
|
1,265 |
|
|
|
1,200 |
|
|
Operating lease right-of-use asset |
|
105 |
|
|
|
255 |
|
|
Other assets |
|
— |
|
|
|
21 |
|
|
TOTAL
ASSETS |
$ |
34,095 |
|
|
$ |
20,012 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Accounts payable |
$ |
1,851 |
|
|
$ |
1,097 |
|
|
Accrued compensation |
|
1,771 |
|
|
|
2,192 |
|
|
Current portion of operating lease liability |
|
108 |
|
|
|
206 |
|
|
Current portion of finance lease liability |
|
27 |
|
|
|
24 |
|
|
Other current liabilities |
|
38 |
|
|
|
66 |
|
|
Total current
liabilities |
|
3,795 |
|
|
|
3,585 |
|
|
Operating lease liability |
|
— |
|
|
|
55 |
|
|
Finance lease liability |
|
33 |
|
|
|
54 |
|
|
Other Long-term liability |
|
286 |
|
|
|
— |
|
|
Total
liabilities |
|
4,114 |
|
|
|
3,694 |
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity |
|
|
|
|
|
|
Series A junior participating
preferred stock as of September 30, 2021 and December 31, 2020, par
value $0.0001 per share; authorized 30,000 shares, none
outstanding |
|
— |
|
|
|
— |
|
|
Series F convertible preferred
stock as of both September 30, 2021 and December 31, 2020, par
value $0.0001 per share; authorized 127 shares, issued and
outstanding 127 shares |
|
— |
|
|
|
— |
|
|
Preferred stock as of both
September 30, 2021 and December 31, 2020, par value$0.0001 per
share; authorized 39,969,873 shares, none outstanding |
|
— |
|
|
|
— |
|
|
Common stock as of September
30, 2021 and December 31, 2020, par value$0.0001 per share;
authorized 100,000,000 shares, issued and outstanding10,537,606 and
2,736,060, respectively |
|
1 |
|
|
|
— |
|
|
Additional paid-in
capital |
|
278,552 |
|
|
|
249,663 |
|
|
Accumulated other
comprehensive loss: |
|
|
|
|
|
|
Foreign currency translation adjustment |
|
(10 |
) |
|
|
(7 |
) |
|
Accumulated deficit |
|
(248,562 |
) |
|
|
(233,338 |
) |
|
Total stockholders’
equity |
|
29,981 |
|
|
|
16,318 |
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
$ |
34,095 |
|
|
$ |
20,012 |
|
|
NUWELLIS, INC. AND
SUBSIDIARYCondensed Consolidated Statements of
Cash Flows(unaudited, in thousands)
|
|
Nine months endedSeptember
30, |
|
|
2021 |
|
|
|
2020 |
|
|
Operating Activities: |
|
|
|
|
|
|
Net loss |
$ |
(15,224 |
) |
|
$ |
(12,750 |
) |
|
Adjustments to reconcile net loss
to cash flows used in operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
383 |
|
|
|
253 |
|
|
Stock-based compensation expense, net |
|
993 |
|
|
|
1,036 |
|
|
Loss on disposal of property and equipment |
|
— |
|
|
|
46 |
|
|
Changes in operating assets and
liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
(164 |
) |
|
|
(249 |
) |
|
Inventory |
|
(105 |
) |
|
|
(1,371 |
) |
|
Other current assets |
|
(183 |
) |
|
|
(74 |
) |
|
Other assets and liabilities |
|
279 |
|
|
|
112 |
|
|
Accounts payable and accrued expenses |
|
333 |
|
|
|
(166 |
) |
|
Net cash used in
operating activities |
|
(13,688 |
) |
|
|
(13,163 |
) |
|
|
|
|
|
|
|
|
Investing
Activities: |
|
|
|
|
|
|
Purchases of property and equipment |
|
(191 |
) |
|
|
(207 |
) |
|
Net cash used in
investing activities |
|
(191 |
) |
|
|
(207 |
) |
|
|
|
|
|
|
|
|
Financing
Activities: |
|
|
|
|
|
|
Proceeds from public stock offerings, net |
|
27,896 |
|
|
|
25,949 |
|
|
Proceeds from warrant exercises |
|
1 |
|
|
|
4,115 |
|
|
Payments on finance lease liability |
|
(21 |
) |
|
|
(14 |
) |
|
Net cash provided by
financing activities |
|
27,876 |
|
|
|
30,050 |
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes
on cash |
|
(3 |
) |
|
|
(12 |
) |
|
Net increase in cash and cash
equivalents |
|
13,994 |
|
|
|
16,668 |
|
|
Cash and cash equivalents -
beginning of period |
|
14,437 |
|
|
|
1,279 |
|
|
Cash and cash equivalents
- end of period |
$ |
28,431 |
|
|
$ |
17,947 |
|
|
|
|
|
|
|
|
|
Supplemental cash flow
information |
|
|
|
|
|
|
Inventory transferred to property, plant and equipment |
$ |
257 |
|
|
$ |
247 |
|
|
Equipment acquired through finance lease liability |
$ |
— |
|
|
$ |
98 |
|
|
INVESTOR CONTACTS:
George MontagueChief Financial Officer, Nuwellis, Inc.
ir@nuwellis.com
Matt BacsoGilmartin Group Matt.Bacso@gilmartinir.com
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