Q3 2025 Nuwellis Inc Earnings Call

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Good day, everyone and welcome to today's new wellis 3rd quarter 2025 earnings conference call.

At this time, all participants are in a listen-only mode later. You may have the opportunity to ask questions during the question and answer session.

Please note today's call will be recorded and I will be standing by. Should you need any assistance?

It is now my pleasure to turn the conference over to Leah McMullen director of communications. Please go ahead.

Hi. Thank you, operator. And good morning everyone. Thank you for, for joining. Today's conference, call to discuss new Ellis's Financial results for the third quarter, and in September 30th 2025,

Chairman of the board and chief executive officer and Lynn Blake who recently began Consulting with us as our interim head of Finance.

Earlier today, we issued a press release that outlines our financial results for the quarter.

If you haven't had the chance to review it, you can find it on the investor page of our website.

Before we begin, I'd like to remind everyone that we'll be making forward looking statements on today's call.

These statements are protected under the private Securities, litigation Reform, Act of 1995 and our based on current assumptions, and estimates actual results could differ materially from those described. And we encourage you to review the risk factors included in our filings with the Securities and Exchange Commission.

The company assumes. No obligation to update. Any forward-looking statements, please do not Place undue Reliance on these statements.

With that, I'll turn the call over to Jon herb.

Thank you, Leah, and good morning everyone. We entered the third quarter with renewed momentum and sharper execution. While Q2 is about stabilizing the business Q3 was about progress, expanding, adoption of Aqueduct therapy and advancing our leadership in Precision fluid management. Across the cardio, renal, continuum,

No Welles is helping hospitals. Manage fluids balance in patients whose heart and kidney functions are closely connected. Our growth is anchored in 3 areas Critical Care, Pediatrics and heart failure. Including hospital-based Outpatient Therapy where our technology is driving real clinical, and operational impact.

In critical care, hospitals are adopting aqueducts because it helps achieve more consistent outcomes and streamlines post-operative and ICU fluid management that confidence translated into stronger performance. This quarter with year-over-year growth in circuit sales across all customer categories, heart failure and critical care also saw higher console sales,

The new 24-hour Aqueduct circuit introduced in the US. This quarter was designed for hospital-based outpatient, use supporting same day sessions and complimenting. Our 72-hour inpatient option together. This choice in circuits, gives hospitals, flexibility to match therapy to the care setting while maintaining consistency for patients and providers.

We also introduced a new dual aluminum extended length, catheter expanding access options in compatibility across care. Environments these Innovations make therapy simpler and more comfortable for patients and more scalable for hospitals.

In Pediatrics progress is quarter was transformative through our nah. Supported collaboration with Corona's biomedical Technologies. We're accelerating the development of Vivian, our dedicated pediatric crrt system for children weighing between 2 and 12 and 20 kilograms.

A new US Patent allowance and recent notice of allowance for another Vivian patent further, demonstrated our commitment to innovation in pediatric fluid management. Additionally, clinical data from the ultra Peds registry being prepared for publication shows third 92% survival in children. Treated with aquadeks.

In heart failure, we reached an important Milestone with the first.

An early proof point of how this care model can extend therapy Beyond inpatient admission and creating more, proactive accessible approach to fluid management.

Operationally we Advanced several important efforts initiating the transition of manufacturing to kdi Precision manufacturing exiting our European operations to sharpen us focus and continuing discipline Capital deployment, through 2 successful Capital raises this year.

As we look ahead, we're building on this Foundation advancing Precision. Fluid management across the cardio renal, Continuum with a focus on clinical value, scalability and growth.

Q3 reflects real progress in growing momentum, as aquadeks becomes an essential part of how hospitals manage fluid balance safely. And effectively with that I'll turn the call over to our interim head of Finance Lind Lake to review our financial results in more detail.

24 primarily due to 1 time prior year, sea star. Medical quell immune sales of approximately 200,000 dollars and and a decrease of approximately $100,000 in international revenues associated with the wind down of international operations in the current quarter.

Also lower console average selling prices. These impacts were, partially offset by a 15% year-over-year, increase in consumables, utilization on a performer basis, Revenue grew approximately 7% year-over-year. After excluding the sea Star Medical Revenue in the prior year and the decrease, in International Revenue sequentially Revenue. Increased 29% from the second quarter driven by a 23% increase in consumables utilization and a 4-fold increase in US. Consul sales.

By customer category, heart failure and critical care were 41% and 15% ahead of the prior year respectively while Pediatrics declined 7% largely due to lower console sales.

All customer categories, experienced year-over-year growth in circuit sales with heart failure and critical care. Also benefiting from stronger consult demand.

Gross margin for the quarter was 65.2% compared to 70% in. Q3 of 2024, the gross margin rate. Decline was primarily due to under absorption of fixed overhead from lower prod production volumes earlier in the year, which flowed through cost of sales in the current order. As that inventory was sold, we do expect to realize incremental cost efficiency from the kdi manufacturing transfer, beginning next year which should support Mar margin expansion. Once the transition is fully optimized

selling General and administrative expenses for the quarter were 3.5 million compared to 2.7 million in the same period. Last year. The increase reflects increased payroll and compensation expense associated with rebuilding. Our Us sales force to historical headcount levels.

Research and development. Expenses were 603,000 compared to 486,000 last year, driven by an increase in expenses, associated with continued investment in sustained, engineering, and our Quality Systems.

As a result of these investments in growth focused initiatives in our us business total, operating expenses for the quarter were 4.1 million in total. A 30% increase year-over-year operating loss for the quarter was 2.7 million compared to an operating loss of 1.5 million in Q3 of 2024, net income attributable, to Common shareholders was 469,000 or

56 cents per share, compared to 2.4 million or 73.23 cents per share in the prior year quarter, after giving effect to the company's reverse stock split, which became effective in July 2025.

We entered the quarter with 3.1 million in cash and cash, equivalents and remain debt-free.

The 1.9 million net Equity raised in Q3 through our at the market program. Combined with the million dollar. Net Equity, raising June provides flexibility to support continued. Execution of our us Revenue growth strategy and operating plan into 2026.

With that, I'll turn the call back to John for closing remarks.

Thanks Lynn, as we look ahead. We're building a company at the center of cardio Renal Care 1 that unites technology evidence and the access to deliver better outcomes for patients and hospitals alike. Our Focus remains on 3 growth engines, Critical Care, Pediatrics, and hospital-based outpatient, heart failure therapy, together. These areas are defining a new standard for precision, fluid management, and positioning new LS, for a long term, sustainable growth.

Before we move into Q&A, I'd like to take a moment to recognize Rob Scott, who recently concluded, his 12-year 10 year here at noelis, Rob's leadership and dedication, as Chief Financial Officer helped guide. Newella through significant transformation and growth on behalf of the entire company. We thank him for his many contributions and wish him continued success. In his new chapter with that, I'll turn the call over to the operator, to open the line for questions.

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And it does appear that there are no questions at this time. I would now like to turn the call back to management for any additional or closing remarks.

Thank you. As we focus the company's efforts on delivering a strong fourth quarter. I'd like to thank all our newella employees stockholders. Physicians, nurses, patients and health care workers for your continued support. Thank you. And have a great day.

This does conclude today's program, thank you for your participation. You may disconnect at any time and have a wonderful afternoon.