via NewMediaWire – Nephros, Inc. (Nasdaq: NEPH), a leading water
technology company providing filtration solutions to the medical
and commercial markets, today announced financial results for the
first quarter ended March 31, 2023.
Financial
Highlights*
- Net revenue from continuing
operations of $3.7 million, an increase of 71%
- Net loss from continuing operations
of $0.3 million, compared to $1.6 million.
- Adjusted EBITDA from continuing
operations of $0.1 million, compared to ($1.2 million)
*Stated performance is relative to same period
prior year (first quarter of 2022)
“We are very pleased to report record net
quarterly revenue and positive cash flow, both significant
milestones for Nephros,” said Andy Astor, retiring President and
Chief Executive Officer. “We are particularly pleased that cash
flow turned positive several months earlier than our forecast for
mid-2023. This was driven by multiple factors reflecting our past
year's efforts, including reduced expenses, normalized gross
margins, and strong revenue growth in both our core and emergency
response businesses.”
"It is my pleasure to join the Nephros team at
this auspicious time,” said Robert Banks, incoming President and
Chief Executive Officer. “I am excited for the opportunity to build
on the company’s recent achievements, particularly with respect to
consistently high growth rates and long-term profitability.”
Financial
Performance for the Quarter Ended
March 31, 2023Net revenue from continuing
operations for the quarter ended March 31, 2023, was $3.7 million,
compared to $2.2 million in the corresponding period in 2022, an
increase of 71%.
Net loss from continuing operations for the
quarter ended March 31, 2023, was $0.3 million, compared to $1.6
million during the same period in 2022. The decrease in net loss
from continuing operations was driven by increased revenue and
gross margins and decreased research and development costs.
Adjusted EBITDA from continuing operations for
the quarter ended March 31, 2023, was $0.1 million, compared to
($1.2 million) during the same period in 2022.
Cost of goods sold for the quarter ended March
31, 2023 was $1.6 million, compared with $1.1 million for the
quarter ended March 31, 2022, an increase of 43%. Gross margins for
the quarter ended March 31, 2023 were 57%, compared with 49% during
the same period in 2022. The increase of approximately 8%,
reflecting a return to target gross margins of 55-60%, was driven
by price increases implemented in 2022, reductions in shipping
expenses, and improved management of inventory reserves.
Research and development expenses for the
quarter ended March 31, 2023, were $0.2 million, compared with $0.4
million during the quarter ended March 31, 2022.
Depreciation and amortization expenses for the
quarter ended March 31, 2023 were approximately $54,000, compared
with approximately $51,000 for the corresponding period in
2022.
Selling, general and administrative expenses for
the quarter ended March 31, 2023, were approximately $2.1 million
compared with approximately $2.2 million for the corresponding
period in 2022.
As of March 31, 2023, Nephros had cash and cash
equivalents of $3.8 million, compared to $3.6 million as of
December 31, 2022.
Adjusted EBITDA Definition and
Reconciliation to GAAP Financial MeasuresAdjusted EBITDA
from continuing operations is calculated by taking net loss from
continuing operations calculated in accordance with generally
accepted accounting principles (“GAAP”) and excluding all
interest-related expenses and income, tax-related expenses and
income, non-recurring expenses and income, and non-cash items,
including depreciation, amortization, non-cash compensation, and
inventory reserve. The following table presents a reconciliation of
Adjusted EBITDA from continuing operations to net loss from
continuing operations, the most directly comparable GAAP financial
measure, for the first quarter of the 2023 and 2022 fiscal
years:
Nephros believes that Adjusted EBITDA from
continuing operations provides useful information to management and
investors regarding certain financial and business trends relating
to Nephros’ financial condition and results of operations.
Management does not consider Adjusted EBITDA from continuing
operations in isolation or as an alternative to financial measures
determined in accordance with GAAP. The principal limitation of
Adjusted EBITDA from continuing operations is that it excludes
significant expenses and income that are required by GAAP to be
recognized in Nephros’ financial statements. In addition, Adjusted
EBITDA from continuing operations is subject to inherent
limitations as it reflects the exercise of judgments by management
about which expenses and income are excluded or included in
determining Adjusted EBITDA from continuing operations. To
compensate for these limitations, management presents Adjusted
EBITDA from continuing operations in connection with net income
loss from continuing operations, the most directly comparable GAAP
financial measure. Nephros urges investors to review the
reconciliation of Adjusted EBITDA from continuing operations to net
income loss from continuing operations and not to rely on any
single financial measure to evaluate the business.
Conference Call Today
at 4:30pm ETNephros will host a conference call
today at 4:30pm ET, during which management will discuss
Nephros’ financial results and provide a general business
overview.
Participants may dial into the call as
follows:Domestic access: 1 (844) 808-7106International access: 1
(412) 317-5285
Upon joining, please ask to be joined into the
Nephros conference call.
An audio archive of the call will be available
shortly after the call on the Nephros Investor Relations page.
Alternatively, a replay of the call may be accessed
until May 17, 2023 at 1 (877) 344-7529 or 1 (412) 317-0088 for
international callers and entering replay access code: 5851475.
About
NephrosNephros is committed to improving the human
relationship with water through leading, accessible technology. We
provide innovative water filtration products and services, along
with water-quality education, as part of an integrated approach to
water safety. Nephros goods serve the needs of customers within the
healthcare and commercial markets, offering both proactive and
emergency solutions for water management.
For more information about Nephros, please visit
www.nephros.com.
Forward-Looking StatementsThis
release contains forward-looking statements that are subject to
various risks and uncertainties. Such statements include statements
regarding Nephros’ expected future revenue, gross margins, cash
flows and expectations on achieving and maintaining positive cash
flow and the timing thereof and other future financial performance,
and other statements that are not historical facts, including
statements that may be accompanied by the words “intends,” “may,”
“will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,”
“estimates,” “aims,” “believes,” “hopes,” “potential” or similar
words. Actual results could differ materially from those described
in these forward-looking statements due to certain factors,
including the impact of the ongoing COVID-19 pandemic, inflationary
factors and general economic conditions, changes in business and
competitive conditions, the availability of capital when needed,
dependence on third-party manufacturers and researchers, and
regulatory reforms. These and other risks and uncertainties are
detailed in Nephros’ reports filed with the U.S. Securities and
Exchange Commission, including its Annual Report on Form 10-K for
the year ended December 31, 2022, which it may update in Part II,
Item 1A – Risk Factors in its Quarterly Reports on Form 10-Q that
it has filed or will file hereafter. Nephros does not undertake any
responsibility to update the forward-looking statements in this
release.
Investor Relations
Contacts:
Kirin Smith,
President
PCG Advisory,
Inc.
(646)
823-8656
ksmith@pcgadvisory.com
Andy Astor, CEO
Nephros, Inc.
(201) 343-5202 x120
andy.astor@nephros.com
Nephros (NASDAQ:NEPH)
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