NEW YORK, NY / ACCESSWIRE / November 14, 2017 / SeeThruEquity, a leading independent equity research and corporate access firm focused on small-cap and micro-cap public companies, today announced it has issued an update on Nephros, Inc. (OTCQB: NEPH).
The report is available here: NEPH Update Note.
Based in River Edge, NJ, Nephros, Inc. (OTCQB: NEPH "Nephros") is a commercial stage medical device company, with innovative filtration products targeting large market opportunities including hospital infection control and advanced renal care. Nephros was founded by two healthcare professionals associated with Columbia University Medical Center / New York Presbyterian Hospital to develop a hemodiafiltration (HDF) device as an alternative to hemodialysis. Nephros has developed proprietary technology to accomplish this goal, and in addition to commercializing an HDF System, Nephros has also developed advanced filtration devices for a variety of applications where ultrapure filtration is of potential value.
Investment Highlights
On November 9, 2017, Nephros reported FY3Q17 results, with highlights as follows:
- Revenues grew by 93% YOY in FY3Q17 to reach $0.92mn versus $0.48mn in 3Q16.
- Product revenues increased sharply to $0.84mn versus $0.41mnin 3Q16.
- EPS came in at ($0.01), consistent with the year-ago period.
Solid 3Q17 results as Nephros grows top line
Nephros reported solid top line results in 3Q17 with limited incremental increases in its operating spending. Overall revenue grew by 93% in 3Q17 to $0.92mn due to the company's focus on expanding sales distribution and the performance of hospital infection control products. The company has already eclipsed 2016 full year revenues through three quarters of results in 2017. For the first nine months of FY2017, total revenues have come in at $2.51mn. This represents 59.3% topline growth from the comparable year-ago period, while with operating expenses have only risen 5% YoY, demonstrating nice leverage in the business.
Nephros monetizes tax credits, targets cash flow breakeven
We were encouraged to see Nephros reiterate its goal of reaching cash flow breakeven in coming months. Specifically, management stated that it continues to expect positive cash flow from operations by "around the end of 2017." Generating sustainable operating cash flow would be a significant accomplishment by management. We have seen the risk of a dilutive share offering at unfavorable prices as a key risk for the company - a risk which would clearly be reduced as Nephros generates sustainable cash flow. In the interim, the company has taken steps to access non-dilutive capital, including establishing a $1mn secured revolving credit facility with a commercial lender and through the sale of a portion of its New Jersey NOL and Research and Development tax credits. Nephros announced that it had been approved to receive $1.9mn in tax credit certificates from New Jersey Economic Development Authority (NJEDA), which are expected be sold during 4Q17 for net proceeds of approximately $1.75mn, according to management.
Price target unchanged at $1.65
Our price target for Nephros is unchanged at $1.65 following results and corporate developments at the company. We view Nephros as an intriguing high risk / high reward investment opportunity in the medical instruments industry with several potential catalysts ahead stemming from growth from new product launches and guidance for reaching cash flow breakeven by year-end.
Please review important disclosures on our website at www.seethruequity.com.
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.www.nephros.com
About SeeThruEquity
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Contact:
Ajay Tandon
SeeThruEquity
[email protected]
SOURCE: SeeThruEquity