CHFS - Earnings call transcript Q1 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. And welcome to the CHF Solutions' Earnings Conference Call for the First Quarter ended March 31, 2018. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Participants of this call are advised that the audio of this conference call is being broadcast live over the Internet and is also being recorded for playback purposes. call of available the the after one of end the call. replay will approximately be hour A I would company's now to Scott like to turn President CORE the of IR, the Investor firm. Gordon, Relations conference over ahead, go sir. Please

Scott Gordon

the company's Thank With to CHF for us John call the company's today company's you, Solutions and Breidenstein, Chairman today's quarter the CFO; ended financial the Claudia developments AM discuss Tiffany. are XX, X:XX for Solutions' thank the joining the released CEO March XXXX. for And CHF Commercial March of and Chief conference and Eastern first corporate results Board; you Drayton, XX, results quarter Erb, XXXX. today, At ended Officer. Jim Time financial

please at visit the If not you have Investors www.chf-solutions.com. release, received earnings CHF page Solutions'

of CHF conference making pursuant are forward-looking during Securities XXXX. the made company will course of the of Except historical by the Litigation made Solutions Safe to of statements Private Reform the the this the information Act be for call, management are conference mentioned Harbor statements. provisions forward-looking that During statements call,

and limited revise other funds not may its the company revenue not known be factors with successfully; in able described possibility raise with may the the information products management. undertakes the unknown forward-looking unable be any acquired successfully strategy; Exchange currently commercialization Risk the possibility businesses products; benefits obligation or to that risks synergies in for caption company's be may the under unable Commission. result its that commercialize that of execute and as company or otherwise. to may and company are to are its based a new anticipated grow to may the company Securities developments, uncertainties involve update to businesses; and future quarters; company the that to no unable associated acquired the not providing on expectations, it from management's that available statements be Forward-looking Those but to statements commercialization may the of this whether be include, and to, new that and risks beliefs, not assumptions, Factors risks the the the risk information, integrate elsewhere that and company projections in the realize filings able information, By necessary or

factors forward-looking and Factors and You subsequent discussion the expectations XX-K, release its for or Exchange with additional John Board. would With included said, that stand statements of discussion by forward-looking issues. having and the website those are John? as like to and sections statements the of Risk the from factors Factors this reference Officer as materially filings I well well statements are we reports, incorporated in to discussion Executive at Please as actual related Chairman should turn and Cautionary to the of the cautionary Commission regarding company's the today, risk the cause review of CHF by other the company's over current as issued Erb, press under Statements Solutions' call the Securities management's Risk technical titles results such available in risk that on differ company's www.chf-solutions.com. to could latest Chief and now are call discussions readily

Operator

patience Once and standby, please and will momentarily. standby. begin please for again call Ladies you thank gentlemen, conference your your

you connected. Okay now are

John Erb

conditions earnings first quarter with when say Scott global that a just update. XXXX provide be filtration introduction for sophisticated, I let pump apologize little to professionals to corporate system vision address everyone. associated for overload quality Welcome and with But to good have morning CHF [indiscernible]. of patient's the We've to thank failure healthcare our improve you. to fluid and diuretics the to call and use Solutions' failed. primarily me and solutions Thank management fluid easy you market is in related yet leader life. mechanical heart

Aquadex and our to reduces an competitive proven patient of readmissions difficult fluid a population. clinically the reduce hospital which system effective decongestion Our solution technology, customers advantage to FlexFlow provides the economic in treat in management, provides for an cost care solution this offers and

XXXX, system the sales company's to ultimately efforts a FlexFlow our and have our specialist strategy, the Those overload largest having which diuretic we increased revenue We were this the to believe, complements Aquadex with nurses the quarter failed expanded the execution largest increase we team to specific growth doctors We as I'm scalable specialists territory. with over working achieved revenue by for The this system adding growth, sales of patients our the four the marketing are first sales the of growth significant dedicated organization, clinical base revenue In result QX expanded dedicated selected the of train clinical of XXXX now includes double-digit quarter identifying nurses suffering failure very appropriately our the experienced in pleased focus adding strategically XXXX first XXXX. quarter of hospitals consecutive strategy. heart -- hospitals. on the field Aquadex nicely with fluid optimize quarters continuing statistically In execution U.S. territories. result a of We our field the statistics of focused force. the a growth with successful from territories, started team sorry, FlexFlow a strength clinical field directly who of increasing adding achieved three in and use team year, and territories field year-over-year in therapy. is of utilization XX over admission of revenue we quarter of heart to sales adding failure XX% team field of commercialization our achieved XX% fourth of in our first on to and

sales team. began education to who and and impactful identify we Additionally, professionals and marketing immediately growing Marketing field hired to and VP marketing additional clinical our a of deliver experienced materials

side, United Asia Southeast strategy international international our commercial distributors. and joined new with we distributors and the Spain expanded in Kingdom by partnering our Italy who On established

commercialization re-hospitalization our efforts, remove globe of accelerated in be position patients overloaded fluid emergency market our diuretics the the expense failed. with clinical sales physicians provider of improve details. ourselves IV from healthcare fluid therapy failure, major growing and reduce intensivists the of over spearheading an continues primary have from to as Solutions awareness at continuing thereby to in of growth can treatment department Given the by to management the reduce I patients therapy-only heart to and to wide now anticipate fluid the ultrafiltration walk their cardiologists, system. turn as expanded the and excess XXXX financial Claudia we ultrafiltration and hospitalists, challenges using you current value QX their diuretic reducing opportunity the faced -- will through to when of results call forefront CHS rates outcomes, who

Following will I that, to we'll provide open the some to and comments questions. be -- call closing

Claudia Drayton

everyone. morning, Good John. Thanks,

Turning QX Revenue quarter over the million, was for first from the and growth of growth P&L. to $X.XX sequentially first XX% XXXX XXXX. the a quarter of XX%

acquisition, to include services the manufacture goods purchased from agreement for of reflected we of which the mark-up the under and products. cost goods a XX% the that time Our manufacturing of Baxter we the paid Baxter cost signed incurred over at finished prices sold that

our in costs with Prairie, of associated includes transition facilities the manufacturing start-up sales of manufacturing Eden cost Minnesota. Additionally, to

announced, completion previously in-house the the XXXX, in the build. of As fourth to completed manufacturing our first operations we production quarter transfer with of

increase. we begin as materialize consume the We in-house units expect later in manufacturing manufacturing that XXXX and internal will the efficiencies margin to benefits and our from volumes bringing Baxter production

including other terms mainly expenses, and in by is and in sales operating made last quarter million sales have the expenses, totaled sales additional XX territories, quarter leadership. and for they support XXXX. first The of marketing R&D $X.X investments million that driven the the and marketing over clinical our of In of organization $X.X SG&A consisting increase versus we the months

of did of warrants in a the loss value that of of warrant. loss million XXXX, I we was quarter XXXX, first in of related the Those the terms change took net the $X.X unrealized our We not net place have of exchange of non-operating change an $X.X to in warrants. in of In on the XXXX. were $X.X million, million to million gain or exercised expenses, compared gains expense warrant of quarter mentioned a the first fair as the non-operating The first part the unrealized recognized income quarter quarter items quarter first the or excluding of in XXXX. before value for $X.X fair

sales and working utilization Regarding in-house position, we increase first inventory. increase our organization, in first the manufacturing transition the finance the the quarter was $X.X of investments from operations by in in million million quarter The capital cash $X our an used and XXXX in driven investments of XXXX. of to primarily to marketing liquidity

Baxter in million cash inventories quarter, During we approximately the from the negotiated and our for $XX.X of completed $X.X final the equivalents accordance with cash million We no in debt. quarter agreement. ended and with purchase

business expect progress. hired XXXX, our continue our to remainder the newly efforts of will of show the modeling actions we the revenue to revitalize accelerate to terms expect that In continue to and and field of personnel

our pricing sell ramp our inventory gross until reflect Regarding manufacturing through continue it paid existing start-up will Baxter the to up the inventory we mid-XXXX, margins, to in-house. as and costs and manufacturing

as to continue well investments John. in in we product will expenses, turn improvements. sales operating our make now as back Regarding the our force to I ongoing over to call expect

John Erb

Claudia. Thank you,

me call optimistic for about reiterate that be our Before to continue let future. opening very questions, the we

impact outcomes to a and clinically tune we proven to reduction ahead, and growth diuretics. significant healthcare to optimize fine giving clinical continue alternative healthcare improve viable strategies Looking opportunities cost to providers by

by develop employees, driving strategic strong continue our to use and metric our and potential shareholders performance. demonstrate investors a our is focus which We will business refine to revenue, to the key measure model

force, fluid in R&D as Socrates enhancements past good peaceful treatment quarter management. Our international spirit, through Renowned devoting to In secret in strategy on Dan us the of our way stand to character continued the of expansion of product not franchise. your old of enhancements including but building the continued this new is new our new. in well Solutions our assist its for is sales the of to our of organizational Millman, energy that wrote all progressing commercialization U.S. XXXX to CHF warrior, fighting the building Aquadex the energy of author, solutions change continue focus as growth stead his in the the product

quality an questions. to to dedicated of improvement have the please the treat passion We’re the to Operator, and open life them. bring improve patients these of solution who to clinicians call

Operator

from Instructions] our Thalmann. [Operator Cohen question Ladenburg first from And Jeffrey comes

open. line Your now is

Jeffrey Cohen

just wanted run I questions. number of to So through a

the now me commercialization complete size you into you can you your through the John, total? having number just walk me can territories, -- said three people XX of firstly sales through the you number of of in So force, walk added territories

John Erb

XX territories We specialists supporting four have and them. sales clinical

Directors two of have also We sales.

total So team plus a of right XX, leading Breidenstein it. Jim now

Jeffrey Cohen

Okay.

the for look what And look like how would XX does moment. of So as as that the year? that toward the end far

John Erb

like sales Director. specialists, have more three to will them add midyear. territories. adding we by be think and We a in budget potential And We clinical place I would get Accounts put also to International

Jeffrey Cohen

are you existing or you finding does incurred any how how And Okay. turnover that have staff, look? the

John Erb

you medical that that Well of respond situations. some in should a talented a and you I in. to Jim, have folks folks previous well overview sales great really question, done brief job done really the have just strong folks hiring Jim has let experience brought that device

Jim Breidenstein

careers Yes. answer honestly in medical and XXX to Many have I medical the device that type organization to technologies ours. like right companies into launch transitioned sales happy earned them senior Sure, larger of the and are Jeffrey. professionals. started brought the that. their Fortune have Folks device quite through we've am

acquired start-up along careers. have So with they they've trainings throughout that mixture also to a experience of the their go

and the you Jeffrey had so new as well of the bit as turnover bring expected you into so very us little and fine are honestly minor on people a our tuning a have organization. technologies get hiring the as it of sales that and that fine quite launching We model [fabricate] half into profiles and it deem 'XX of back we would as tune allowed has forth. amount I to the

Jeffrey Cohen

you mentioned million Claudia Okay, to inventory and helpful. that's $X.X of Baxter. purchased you super,

million, about up where right? from out $X inventory So your of did see I $X.X million that around to year now come is that last is and

Claudia Drayton

agreed we agreed remaining Yes. to finished well the When we to Baxter and manufacturing with steps was final it's raw bring on the Baxter from materials inventory the buy as goods. in-house that as

So transition. as this of was all planned our part

Jeffrey Cohen

of the on income million the the change Okay, got it. warrants on in gain fair $X.X value statement. The

You the reflected a statement? the is gain on a a year this income ago statement, income there reflection QX on quarter

Claudia Drayton

to were be last exercised, Those We -- adjustments, marked value those warrants have to no were require that warrants needed thankfully. value. in We up longer fair those were that warrants Right. exchanged QX. year fair

type no sheet. we have warrants longer So on derivative balance our

Jeffrey Cohen

And for got million. million it. quarter the the can look level talk for OpEx $X helpful then basis? then might maintaining insight of firstly, the Do you year, $X.X of any that the from And quarterly a see $X.X be Okay, kind on balance little about the we of first year, SG&A, the the there? million for balance the would R&D a how this

Claudia Drayton

in R&D half investments we be product the sales Yes. SG&A year. We we on our of uptick towards well as adding slight in see because again a slight to a will continue the uptick And make additional last improvement. people as

Jeffrey Cohen

for Okay, shares, got X.XXX quarter, The correct? the it.

Claudia Drayton

Yes.

Jeffrey Cohen

for XX.XXX quarter, the correct? Cash

Claudia Drayton

Yes.

Jeffrey Cohen

Long-term Debt zero? debt, zero?

Claudia Drayton

yes. Debt zero, Yes.

Jeffrey Cohen

John, then in playing data I failure users a the of and near-term, that some some bit some heart at finally, ongoing you some could And your the out how your for the little of of least you short and conferences and solution are registration talk see the guess studies and Okay. have of and about clinical presented please?

John Erb

healthcare to get failures Heart large patient of population continues because because Sure. only cost. not the spotlight the very a but bright of

over to You've in was to heart XX that heard in U.S. estimated just XX next And were $XX failure. me about billion the spent years. say in the it that's double on expected XXXX, the past

there. attention of lot a just is there So

main many that relieve I the has fluid therapy us to that think is exacerbate opportunities it the It but of standard is overload is somewhat helps that current of clinical the publications for the indicating the care problem. that not them can fact patient. a one actually detrimental

to clinically we be both sitting and a to help spot are good there really So very able economically.

in and the were Maria rising the was bump in of nothing who Dr. ultrafiltration ultrafiltration. about most to is probably of an Rosa fact couple of for value really different has I over one patients. and Costanzo, trial, ultrafiltration not CARRESS issue. in is the Where the believe particularly paper of a designed, outspoken week opinion the a that Heart trial next ultrafiltration showed showed is have actually a to physicians really period a the that she these that [c-emcreten] Meeting the European presenting has Failure in that of think it pointing after be published Vienna preference data which failure, indicating published as lot of leaders out patient of included short now inappropriate out She is. that will way at that regarding with to it trial value diuretics relatively the key And by that protocols of to time. in [c-emcreten] heart Cardiology do there And come Society after care better is person additional value been

out. attention. product a So trial. along, be than help lot of patients. a somebody out they kind helps these it's Again, in a small is getting is I it's build and ground only off Smaller thing the it trial, small, the There ultrafiltration, a one with good there player getting of product regarding can have comes of market there, that else is when also says a the large continuing shouldn't data to say different its Europe coming

and the in to So management, position. fluid this in leaders be we heart market are particularly in failure excited

Operator

Benchmark. And question Myers comes our with Raymond next from

Your line is open. now

Raymond Myers

John. you, Thank

able anticipate to my of we that some might support preview Aquadex is many for should hoping there But I you that? I and shortly economic believe be was of that answered questions. more You've some

John Erb

budget that basically to the a very [embargoed] and the week is to that actual been really of Failure. an has Yes. of ultrafiltration an until ultrafiltration completed that's publication peer-reviewed detailed economic look is benefit We made being diuretic. has that at I about at results hospital We do -- the third-party over ISPOR consultant do commissioned versus presented lot talks of basically this data And abstract believe actually and large that a analysis have economic ultrafiltration public. overview very for Cardiac actually publication at positive that submitted diuretics. have Journal And it's been for been have

about eager to to So talk we results of and point. but I am anxious publicly its the able publication the be analysis at to protect this need

Operator

[Operator Instructions]. And and from we Thalmann. Ladenburg here have Jeffrey Cohen with one

open. now is line Your

Jeffrey Cohen

of John current follow-up. number of of quick little a Could number use a current Just and about facilities? you number talk users of systems and

John Erb

that. is if to Jim closer that, think you him lot Jim? address I would Yes, to I'd for like a

Jim Breidenstein

XXX happy that the which we say grow you are sure continues our but a selectively probably growing to Jeff. growing think are and I us Yes, to and I but have certainly with quarter-over-quarter John customers Currently growing business it we active with heard we small force.

technology, opportunity it to do the and the So support it time institutions appropriately increase we utilization we offer we offer uptake but only service training and utilize of when spend to we and we to make that for technology. not sure the education want our to and enough

So we business. are growing the

to about as there's out again which We list rate plus foster $XX,XXX you appropriate go-deep grow well in us. that that's in we and us. a deployed, each for quarter that And business and when terms are of we till course terms strategy for systems of XXX it long-term if results and of growing to-date, at the our continues price acquired will think for we the still will think sells every console systems there capital controlled number the

Jeffrey Cohen

of more probably users point? seeing and So footprint I of result suppose as revenue you a increased uptake this expansion to at existing the utilization are of

Jim Breidenstein

treatment to which obviously. with sticky scale the more boarder and of a fronts And long-term we resources, you on of grow somewhat comfortable and and adoption. feel both business that the running yield to the that's more Jeff, get limited is in course always key the to -- up increase to continue base is to is in protocol. small feel course will their point that seen and thing, diuretic are long-term our Jeff, clinicians once an Aquapheresis when protocol and heart will to In pathway, strategy patients other I explanation again in and again think force technology offer a deep the go efforts goal grow that getting is, as begin out are But technology, that words, into isn't there's utilizing that's have account easy avenues And we critical to our utilization just patient and you you will the injective an of if adoption an technology be of treatment hospital's but part as you will that's for earlier we of they sell an of why inserting to where the failure line on. therapy. into that focusing to kind

Operator

Okay.

queue. more showing Now I'm no in

John Erb

thank Very wish XXXX Thank call, I good. you. Thank first day. conference operator. you, Well, I a all want you and quarter really good for really, you joining all to our

Operator

your Ladies in today's thank This you participation and conference. gentlemen, for program. concludes the

You day. may now great disconnect. have a Everyone

Nuwellis (NUWE) 8 May 182018 Q1 Earnings call transcript