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Nephros Reports Second Quarter 2018 Financial Results

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Quarterly Product Revenue Up 55% Year-over-Year; Total Revenue Up 59%

Company Plans Uplist to National Stock Exchange

Conference Call Scheduled for Today, August 8, 2018, at 4:30 PM EDT

SOUTH ORANGE, N.J., Aug. 08, 2018 (GLOBE NEWSWIRE) -- Nephros, Inc. (OTCQB:NEPH) ("Nephros"), a commercial stage medical device company that develops and sells high performance liquid purification ultrafilters and an on-line mid-dilution hemodiafiltration system for use with a hemodialysis (HD) machine for the treatment of patients with End Stage Renal Disease (ESRD), today announced financial results for the three months ended June 30, 2018.

"Today's results represent our eighth consecutive quarter of year-over-year revenue growth averaging 59%," said Daron Evans, President and CEO. "We believe this consistent growth in our ultrafilter solutions reflects increasing confidence from both our customers and our valued distribution partners, and we are confident that we are strongly positioned for the future."

Nephros also announced plans today to pursue listing on a national stock exchange. As part of this effort and in order to satisfy stock price listing criteria, Nephros intends to initiate a reverse split of its common stock in approximately thirty days.

"Given our growth and strong balance sheet, we have begun the process of uplisting to a national stock exchange," said Andy Astor, CFO. "An uplist is likely to increase the visibility and liquidity of Nephros's stock, with a broader audience of additional investors who will be able to consider investing in Nephros."

Financial Performance for the Quarter Ended June 30, 2018

Product revenues for the three months ended June 30, 2018 were approximately $1,216,000, compared to approximately $785,000 for the three months ended June 30, 2017, an increase of approximately $431,000, or 55%. Total revenues for the three months ended June 30, 2018 were approximately $1,366,000, compared to approximately $858,000 for the three months ended June 30, 2017, an increase of approximately $508,000, or 59%.

Cost of goods sold was approximately $536,000 for the three months ended June 30, 2018, compared to approximately $341,000 for the three months ended June 30, 2017. Research and development expenses were approximately $352,000 and $277,000 for the three months ended June 30, 2018 and 2017, respectively. Selling, general and administrative expenses were approximately $1,091,000 for the three months ended June 30, 2018, compared to approximately $881,000 for the three months ended June 30, 2017, representing an increase of $210,000, or 24%.

As of June 30, 2018, Nephros had cash and cash equivalents of approximately $3,484,000.

Conference Call Today at 4:30 PM EDT

Nephros will host a conference call at 4:30 PM EDT today, during which management will discuss Nephros's financial results and provide a general business overview.

Participants may dial into the following number to access the call: 1-866-652-5200 or international callers using 1-412-317-6060. Please ask to be joined into the Nephros conference call. A replay of the call can be accessed until August 15, 2018 at 1-877-344-7529 or 1-412-317-0088 for international callers, and entering Replay Access Code: 10123077. An audio archive of the call will be available shortly after call on the Nephros investor relations page at https://www.nephros.com/investor-relations/.

About Nephros, Inc.

Nephros is a commercial stage medical device company that develops and sells high performance liquid purification filters, as well as a hemodiafiltration system for the treatment of patients with End Stage Renal Disease. Nephros filters or ultrafilters are used primarily in medical applications in various settings. These ultrafilters are used by dialysis centers for assisting in the added removal of biological contaminants from the water and bicarbonate concentrate supplied to hemodialysis machines and the patients. Additionally, Nephros ultrafilters are used in hospitals and medical clinics for added protection in retaining bacteria (i.e. Legionella, Pseudomonas), virus and endotoxin from water. These ultrafilters provide barriers that assist in improving infection control with showers, sinks, and ice machines.

For more information about Nephros, please visit its website at www.nephros.com.

Forward-Looking Statements

This release contains forward-looking statements that are subject to various risks and uncertainties. Such statements include statements regarding Nephros's expected financial results for the fiscal year ending December 31, 2018, its expected growth in medical, commercial and industrial filter sales, including the expansion into new markets, its anticipated reverse split of its common stock, including the timing for doing so, and other statements that are not historical facts, including statements which 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 uncertainty in clinical outcomes, potential delays in the regulatory approval process, changes in business, economic and competitive conditions, the availability of capital when needed, dependence on third party manufacturers and researchers, regulatory reforms, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Nephros's reports filed with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2017.  Nephros does not undertake any responsibility to update the forward-looking statements in this release.

Contact:
Andrew Astor, Chief Financial Officer
Phone: 201-345-0824
Email: andy@nephros.com

 
 
NEPHROS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
 
  (Unaudited)     (Audited)
  June 30, 2018     December 31, 2017
ASSETS            
Current assets:            
Cash $ 3,484       $ 2,194  
Accounts receivable, net   855         836  
Investment in lease, net-current portion   31         20  
Inventory, net   1,352         674  
Prepaid expenses and other current assets   49         85  
Total current assets   5,771         3,809  
Property and equipment, net   28         52  
Investment in lease, net-less current portion   30         39  
License and supply agreement, net   1,005         1,072  
Other asset   11         11  
Total assets $ 6,845       $ 4,983  
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
Current liabilities:            
Secured revolving credit facility $ 153       $ 711  
Current portion of secured note payable   187         -  
Accounts payable   679         872  
Accrued expenses   377         218  
Deferred revenue, current portion   -         70  
Total current liabilities   1,396         1,871  
Secured note payable, net of current portion   951         -  
Unsecured long-term note payable, net of debt issuance
costs and debt discount of $0 and $233, respectively
  -         954  
Long-term portion of deferred revenue   -         208  
Total liabilities   2,347         3,033  
             
Commitments and Contingencies (Note 15)            
             
Stockholders' equity:            
Preferred stock, $.001 par value; 5,000,000 shares
authorized at June 30, 2018 and December 31, 2017; no
shares issued and outstanding at June 30, 2018 and
December 31, 2017
  -         -  
Common stock, $.001 par value; 90,000,000 shares
authorized at June 30, 2018 and December 31, 2017;
64,166,988 and 55,293,267 shares issued and outstanding
at June 30, 2018 and December 31, 2017, respectively
  64         55  
Additional paid-in capital   127,299         122,924  
Accumulated other comprehensive income   74         77  
Accumulated deficit   (122,939 )       (121,106 )
Total stockholders' equity   4,498         1,950  
Total liabilities and stockholders' equity $ 6,845       $ 4,983  
 


 
NEPHROS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except share and per share amounts)
(Unaudited)
 
    Three Months Ended
June 30,
    Six Months Ended
June 30,
 
    2018     2017     2018     2017  
Net revenues:                                
Product revenues   $ 1,216     $ 785     $ 2,174     $ 1,475  
License, royalty and other revenues     150       74       177       118  
Total net revenues     1,366       859       2,351       1,593  
Cost of goods sold     536       342       1,054       621  
Gross margin     830       517       1,297       972  
Operating expenses:                                
Research and development     352       277       641       507  
Depreciation and amortization     40       60       81       119  
Selling, general and administrative     1,091       880       2,351       1,651  
Total operating expenses     1,483       1,217       3,073       2,277  
Loss from operations     (653 )     (700 )     (1,776 )     (1,305 )
Loss on extinguishment of debt     -       -       (199 )     -  
Interest expense     (28 )     (64 )     (114 )     (130 )
Interest income     1       1       2       2  
Other expense     (2 )     (23 )     (24 )     (33 )
Net loss     (682 )     (786 )     (2,111 )     (1,466 )
Other comprehensive (loss) income, foreign currency translation adjustments, net of tax     (6 )     7       (3 )     8  
Total comprehensive loss   $ (688 )   $ (779 )   $ (2,114 )   $ (1,458 )
Net loss per common share, basic and diluted   $ (0.01 )   $ (0.01 )   $ (0.04 )   $ (0.03 )
Weighted average common shares outstanding, basic and diluted     62,456,668       53,626,707       59,031,649       51,625,048  

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