CHFS - Earnings call transcript Q3 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 Third Quarter ended September 30, 2018. All participants will be in listen-only mode. [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. A replay of the call will be available approximately one hour after the end of the call. I would now like to turn the call over to Scott Gordon, President of CORE IR the Company’s Investor Relations firm. sir. ahead, go Please

Scott Gordon

Chairman Company’s Time us Claudia Eastern Drayton, the and CHF the for ended Solutions CHF financial Solutions’ quarter XXXX. the Norma call results released today’s to CFO. Erb, for of third X:XX With September XX, September discuss corporate ended the XXXX. are Company’s quarter At thank Board; and you, CEO John a.m. today, the joining financial you results conference for today Thank developments and XX,

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

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

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

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

John Erb

talked and revenue our Four, we sales commercial investing you, most new fluid our clinical XXXX year-over-year six successfully customers the with increasing importantly, strategic each publicly of investing update. Scott our over direct U.S. areas team. third diagnostic for earnings the of year-over-year our growth management. manage over Welcome continues to initiatives revenue and double-digit Two, quarters developing with territories months morning this to third applications corporate U.S. revenue our increase in our market Three, past in consecutive representing clinical growth. We XXXX fluid and investment including help morning, and the teams. direct call the XX on number clinical medical successful review international the sales we and five, have about QX, sales expanding in strategies growing made of versus to quarter in footprint. target we of is in the technologies and/or removal CHF our one, execute increase XXXX, starting result Thank growth. everyone. good XX% XXXX QX Solutions’ revenue strategy two in with will achieved growth. quarter started revenue our and and XX% QX I a believe and We We specialists. a XX execution U.S. of clinical have

including filed we quarter sales our director of bring clinical commercial our clinical very three experienced the During to education. based to of and additional director individuals, specialists XX our team added senior

Cardiovascular patients focus we failure the administered field readmissions XX the expansion dysfunction, Fluid of have most nicely infections post Going XX.X% of treatment and administered sales with accounts effectively post physicians our procedure one from for and additional to the system The days form of of patients contributes we to if for a between for and reported in with surgery pursue market working To train on number increased believe Aquadex efforts as therapy. synergies surgery. to have extra overload far. to of FlexFlow the with effectively ultrafiltration of fluid ICU of fluid investment extent, not field FlexFlow responding so cardiologists of fluid We patients optimize surgery as not forward, overload in is creates opportunity. postsurgical continuing as after Excess and post our heart the expect partner and renal investments is common within resources market third overloaded look community modest clinical patients market focused into next the field surgery. for post forward team natural the CV and cause will nurses have medical surgical surgeons fail announced, readmissions be system frequently diuretics. made step the and suffering days with diuretic who treatment in leveraging and additional use are commercial team medications the simple a our necessary fluid group often cardiovascular can arrhythmias with that of initiative fluid that XX and and the cardiovascular Aquadex cause for organization our the Surgical therapy. fluid the to CV fail specialty medical treatment other marketing surgery to post focus. patients stay need by in significant removed on heart postsurgical overload us diuretic provides who believe complements associated patients expansion any length the can volume overload market by growth be the or our challenged the team treatment suffering previously of prescribed failed from offers fluids mortality. and focus field during The surgery overload opportunities. expanded we We in due that to commercial overload the and directly

We our are VA. with clinical the making market, progress primarily with moving into heart failure partnership Tampa the outpatient

utilizing United set outpatient physician Aquadex consoles the in Medical five-year quality utilized the Both A. Affairs FlexFlow of previously has on blood reducing the for outpatient for Haley of life systems solutions CHF and disclosed, As Department facilities. care improving Department for initiated contract of and system focused admissions Florida. to VA studies cost circuit the in the and by awarded will Center hospital of States Affairs veteran’s disposables Veterans be FlexFlow Aquadex James Tampa, supply $X.X million Veterans

fulfillment Kong grow and of earlier Singapore. entered we important has for the our German a to clinical product We the international and business from medical market support. evaluation an received adds FDA the and additions of recently as FlexFlow in Hong Germany, sold heart of current logistic Dresden its cardiology centers with relationships our Asia largest launches with a University TransMedic, registration in Germany's Aquadex expanding with continues HSC by third commercial The through house serves which which Hospital Center distributor begun Thailand Our system. one provides Thailand quarter GmbH, Southeast to

small will the fluid cardiovascular, volume physicians to that a to We when on and identify medical identifying from patients help them of the patient collaboration respiratory to discontinue NI NI clearly The inform diagnostic parameters treatment benefits overloaded agreement with to utilizing patients. system. with ultrafiltration. the announced inform to more on technologies Medicals Aquadex Medical with and throughout parameters potential are company. initiate manage more diagnostic solutions and treat fluid focused a therapy on collaboration in selection, We to device to and effectively how appropriate fluid Israeli using therapy, evaluation researching patient multiple providing navigator therapy NI the recently initiate hemodynamic ultrafiltration remain providers We when Aquadex hemodynamic cash during and FlexFlow dedicated

start a with BVA-XXX announced when Daxor This synergies another on clinicians to to clinical results. blood tools, last collaboration and evaluate that and fluid synergies to between system and agreement of In this important to collaboration the potential to manage Daxor newest therapy explore - with ultrafilteration BVA-XXX may the with collaboration addition, Daxor’s FlexFlow company's believe diagnostic clinical analyzer. to therapy. volume evaluation Aquadex fluid which also using selection, to block inform achieve refine the will Corporation status, initiate Daxor's building week, We maximize positive our is strategy and we volume including of patient determine our small how management

market evaluations, technologies both synergies the which CE clearance for has additional will each analyze the and clinical clinical of for mark. we commercial (NYSE:K) between XXX Following future conclusion further FDA and

been of seek early intend clearance AcQtrac the both in hemodynamic designed technology the regulatory quarter XXX System measure available third advancement, for and mark technological CE product before clinical internal and cardiac will settings. is acquisition outpatient has additional further and (K) in AcQtrac utilizing to to technology from patented we use and the impedance commercial It cardiography. be System Incorporated, the we a evaluate again inpatient completed noninvasive cleared device Vasamed Moving development, in parameters to the

hospitalist, the the provider expanded and surgeons. sales anticipate our efforts, further for as worldwide continuing we accelerated ourselves ultrafiltration therapy in growth cardiac market of Given to commercialization intensivests cardiologists, position by primary

now market Claudia, the through the introducing diuretics failed, continues failure diuretic treatment reduce and is awareness of challenges thereby major therapy for leader to forefront the healthcare results of will who improve and vision spearheading global the patient's reduce hospitalization IV become clinical I XXXX solutions system. call faced to alone walk solutions heart at outcomes, fluid and over in rates to our improve details. CHF using be value current life. Our filtration to of growing an financial the management you as the can QX clinical fluid management quality to with when have the turn with expense opportunity in

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

Claudia Drayton

Thanks, John. Good everyone. morning

we products. cost for P&L, XXXX. agreement last QX the versus year. at were and XXXX Total the X% and growth our development. from of late that up last to third costs in QX year services fairly of quarter investments incurred goods XXXX more of goods and marketing QX paid million XX% to QX, X,XXX,XXX Baxter sequentially expenses early by research over to from versus $X.X the which $X.X goods by cost XXXX. finished third for increase mark manufacture as was includes the acquisition, and time repurchased effectively XX% to over quarter driven Turning the The major investment cost and to this we a the sold, in made quarter XX% million growth the revenue sales have we for and remained of from prices sold the with increase our under XXXX, of the begin reflect manufacturing costs in and the from were and flat signed leveraged and Baxter expenses Sequentially Starting

Additionally August associated which the to sales activities we Minnesota, manufacturing the facility of with transition in costs XXXX. manufacturing cost our includes in startup Eden completed Prairie, of

last increases In and investments driven additional marketing increases John sales including expenses, and sales clinical marketing marketing the we selling and XX have in terms our over support of the organization mentioned. as and in by territories, made leadership the are months, primarily sales

in also the customer and market. our to in experience are R&D and We investment improve making adoption devices improve increase the of functionality

$X.X $X.X Net expensed AcQtrac or R&D of mentioned to we During was significant million the third quarter, this net quarter. compared of XXXX. John also was of were operating in acquired items during not income the as XXXX a earlier, quarter or second for the expense loss the quarter Net the technology loss in million. the technology quarter XXXX

decrease liquidity to an position, from of of QX used quarter increase $XXX,XXX a sequentially current XXXX the $X.X QX in of our million Regarding finance and over operation, we XXXX. $XXX,XXX

million ended months XXXX. first debt. the approximately equivalent in We an finance the nine of cash $XX.X the and increase were million of months year the For three of first and nine million no with operations utilized $X.X quarter from to cash

continue continue the for quarters. remainder we expect we to prior to In grow terms versus have of modeling trajectory XXXX, year into the six been and revenue double-digit on and the XXXX last of the

marketing an impact, in force to acceleration education throughout have sales expect and the We growth. XX months our implemented we to continue to have nine program last programs and it revenue the of will result continue tools

in Regarding margin mark selling efficiency own our we the volumes up. our QX gross internal reflect the to expect our see to begin margin Baxter continue paid to we of in eliminating to improvements. later quarters QX that will and In start XXXX see manufacturing Baxter margins expect and manufacture increase, benefits inventory to pricing additional inventories XXXX, from the to production

back in made I call expenses, our organization Regarding the to continue in John. will expect we manufacturing now effort. - and have leverage the operating to we over turn house to investment

John Erb

Thank you, Claudia.

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

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

We strong management. model its new a the which demonstrate energy business devoting measure will to develop and shareholders metric solutions potential focus CHF solutions is is to our employees, to investors refine revenue, key driving the in use fluid performance. assist building to to our treatment of continue our and by

call Operator, who bringing passion questions. are open of them. the proven these the improve We the and patients life that dedicated for to to please treat quality the solutions to clinicians have

Operator

[Operator Our first of question you. comes Jeffrey from Ladenburg Cohen Thank Instructions] Thalmann.

line is now open. Your

Jeffrey Cohen

morning. Good

some annual a prior specific? revenue Claudia, of commentary versus double-digit, be ago, aspirations your more estimated moment So the just can a year, little firstly growth of talked I about revenue toward end you guess of you growth so double-digit

Claudia Drayton

the at not do year We for but in we the give this will that we given point guidance have formal not yet future, prefer to and guidance.

Jeffrey Cohen

Okay got it.

us you number talk forward through to as like number utilization, us QX little little get type kind you we a see give give on So cases more far broke circuits a little as one-time our can of perhaps that growth about users ramp and facilities far current of color as if of upside there, and can John understanding that number better used nature, the out on can QX revenues, it are are if looks bit a its in of the some flavor a so of to we going as going carried XXXX? bit

John Erb

Sure.

team I think the we greatest in impact in QX was the effectiveness have of the place. that sales put

to set the the six the had opportunity QX, months, at of to a to those the two rep months for take look it really utilization. less sales really the really. an their And new you sales good really territory administration, XX hospital developed, know than six hospitals, physicians from and up be an months adoption hospital and anywhere As in majority been individuals for within four grow territories

the third we that in think effectiveness. quarter, see I So began to

XX will territories fourth we quarter. grow the see that these in think continue with sales to I

then quality account. developing could positive the three would two We efforts with once and hospital lot so former three an going it and them around typical strategy of actually learned A to accounts but to up expanding nurses XX be from to training from. been also from do XX it of the of that the the systems have In eight from trained. specialists, of just in initially lot are to doing with activities failure know utilization increase the within where and total therapy. nursing might their a heart you systems. implement one hospital under we of spending there has time, at in took the key there most are getting continues which teams about at XX accounts where really looking were nurses those so help job probably we to very getting and really who of point is think that have hospital primarily hospital, six and hospitals of the is we looking nurses, in could proven more and to added heart accounts piece five folks our that quarter, to anywhere single systems that be If be a hospital Total be been come at not to this implemented improved with began each in have but in shift, folks which nurses time And third of accounts These the is XXX a help of shift the and clinical also future nurses are that failure those improve per that just the alone growth or clinical are a account. specialist utilization. need spend specialist that excellent the time clinical it's

So building I base it's Claudia going accounts increasing I in have I now. as growth think is and online, I can think to in think place, the from the this double-digit look forward to time we forward point said, utilization at the we are coming team quarter-to-quarter and think continue really

Jeffrey Cohen

will a as look in little the AcQtrac will collaborations it being market Okay that couple with as got how as cohesive in the the of a also stay one well well. it. commercial and space could these basically addition about you team of the that the And bolt-on unit talk be AcQtrac, distributive with growing, does

John Erb

and and on to that. working regulatory system the think that be be our be with very to to bring development are work AcQtrac. system. our of we need a work with Aquadex will that used developed Sure, standards we AcQtrac well that do me let complementary up Aquadex into tools to start product a can some is we There

do AcQtrac matches I beginning is understanding better BVA-XXX ways fluid heart manage an not excellent up later anticipate in the the physicians level that There with XXXX. failure believe diagnostic with this a system capability that these to provide multiple Daxor particularly really very and are the technology our better So to until in patients, to commercialize patients. nurses We well Aquadex that need were we have that marry initial technologies. we understanding technologies certain with those customers patients a companies in talk improve teach There this to working can how to on the of messaging do we so two the outcome. clinical we to benefit small Daxor and together the both will where good will evaluation to are eager patient to about put really in

So over couple And it's we working of it’s violent than with closely themes, as important that NICaS for how have is the multiple they but more of next volume months diagnostic be the their methods will a same technology, also the on different on that have a felt Daxor of physicians system, the NI it tools Medical with different that. different preferences analysis, to patient. was manage blood We them. provide to system,

a So evaluation NI Medical’s system. small NICaS with, we doing also clinical will be

would end it the the will liters get cardiac fluid five the liters, getting know having So or have been come diagnostic cardiac quarter in fluid for of this critical in Medical done a specifically need patients have they surgeon commit the see ICU, and fluid to on from and amount with NI first heart-lung tool his XXXX. they machine, are that that they they standpoint, added to of Daxor is we is of because really a less diagnostic if off. that and begin the three liters say In I four by a tool with there that put impact of it the surgery, the I they patient need could is of in great to commercialization off early considerable XXXX, be I year, think on but surgery, as of cardiac

have surgeon it's to in fluid more technology diagnostic more it's heart fluid know but important, that different So on. bit heart will same A an is to the a surgery, little patients there physicians than how and situation not in impact that put they acute with failure cardiac for as what failure. have going the will cardiac they much the it use remove be that

Jeffrey Cohen

and any Okay are fluid as may, to prior and as far then or next week or regulatory on guard seeing anything one you more - AJ hearing overload. are line of the just any front there changes if out I providers

John Erb

at time. No, point we not this seeing are anything in

Jeffrey Cohen

it. Got

it that for Thanks Okay me. John. is

John Erb

Thank you Jeff.

Operator

you. Thank

comes question from Anthony next of Our Group. Vendetti Maxim

line is now Your open.

Anthony Vendetti

and One for Thanks. question then Claudia. John for one question

bit the to a wanted parameters little set of two I Daxor, under here, John can products many how in a a on little perfect it patients ask like you see to in from question seems fit compatibility, to but one around a give have terms more the weather Sorry the small trial that benefit. you be clinical truck just would

John Erb

Relatively This really clinical of to to Daxor both to is understanding of which how trial best XX be have have together. clinical a Yes. for the work just XX it's could small. and good patients technologies Solutions evaluation more a and CHF and

is no technologies. are a step to products utilize already market simply know commercialization cleared, best to there both need how sure process the our make in clinical to customers trial. the tell we This is for So

Anthony Vendetti

or and Claudia Okay, is this drove strong an that anomaly margins of gross that. a quarter, what somewhat then very

Claudia Drayton

manufacturing. our and increased sales by is driven we internal are up ramping It

As the Baxter acquired I we but that own. the off are to selling we Baxter, by said our manufacture continue one we to beginning manage our from inventory

So some that of by helps observing into cost inventory. our

helped like well. us I strong has the As said revenue growth well

Anthony Vendetti

you. Thank great. Okay,

John Erb

you. Thank

Operator

Thank remarks. I Erb you. turn the John to like to At over closing this time, Mr. would call for

John Erb

want call you much quarter to you. I and XXXX very you for our all day. thank joining wish good conference I a Thank very third

Operator

Ladies you participating today's conference. in and thank gentlemen, for

wonderful day. a Have You may disconnect.

Nuwellis (NUWE) 6 Nov 182018 Q3 Earnings call transcript